Author: Nyla Sarwar

"Big Heads" seek financing for climate change (Image by: Oxfam)

An ambitious and positive draft text presented at the UN climate summit has failed to impress developing countries, who argue that more finance is needed to support their low carbon development and adaptation in some of the most vulnerable nations.

The so-called “long-term action plan text” believed to be much more positive that the “Danish text” leaked earlier in the week, sets GHG reduction targets for developed countries of around 25-45% by 2020 against a 1990 baseline. These targets are expected to be extremely ambitious, and will require the sequestration of already emitted atmospheric carbon, potentially limiting worldwide temperature increases to 1.5C - 2C. The text is now up for negotiation, and demands much stronger commitments from the developed counties, compared to figures already laid out on the table.

UK PM Gordon Brown has been actively engaged in the negotiations to encourage the EU to confirm its more ambitious commitment to reduce GHG emissions by 30% by 2020 against a 1990 baseline. It is expected that this will require the UK to contribute 40% emissions reductions by 2020, instead of the 34% share previously committed.

Gordon Brown has also been pivotal in negotiations among EU leaders to provide immediate finance for developing countries to adapt to climate change. Announcing that the EU would commit 7.2bn euros (£6.5bn, $10bn) for adaptation in developing countries over the next three years, Swedish Prime Minister Fredrik Reinfeldt reaffirmed Europe’s commitment to moving the Copenhagen negotiations closer to a global deal.

The UK’s promise, at £500m ($800m; 553m euros) a year, was the highest. Reports from Brussels suggest the German contribution will be 480m euros per year from 2010 to 2012. Earlier, Mr Brown and France’s President Nicolas Sarkozy told a joint news conference their two nations would contribute at least £1.5bn (1.7bn euros; $2.4bn) spread over the three years.

The money pledged is for a “fast start” fund to help the world’s poorest nations tackle rising sea levels, deforestation, water shortages and other consequences of climate change between 2010 and 2012, and reduce their own emissions.

The promised EU contribution will make up a sizeable portion of a proposed global figure of $10bn (7bn euros) annually.

Financial discussions in Brussels saw EU leaders during the International Monetary Fund (IMF) to consider a global tax on financial transactions to reduce the risks of a further financial crisis and raise funding for tackling climate change.

“The European Council encourages the IMF to consider the full range of options including insurance fees, resolution funds, contingent capital arrangements and a global financial transaction levy in its review,” the summit’s final statement said.

Whilst the text confirms the consensus between nations that halting forest protection is crucial, the details of measures to reduce deforestation are still al long way off. Developing countries are still demanding more funding from developed countries, and the details of a long term and fundamental financial package still remains hugely uncertain. The new text also requires developing countries to cut their carbon emissions by 15-30% by 2020 compared to BAU, and developing countries retired from the plenary requesting further time to digest the potential consequences of such commitments.

Additionally, reports suggest that the EU and US have finally agreed to a twin track deal which ensures that the Kyoto protocol - the only legally binding treaty that forces rich countries to cut emissions - continues at least until a new legal treaty is signed.

“This is very, very complicated. It’s tough because the world is trying to peak emissions. There is a long way to go. We are anxious and conscious of the scale of the challenge that remains,” said the UK climate and energy secretary, Ed Miliband.

The text will be negotiated in more detail next week, with details of a finance package and forest protection measures expected to dominate discussions. Developing countries will be calling for tougher commitments, and as Nasa scientist Jim Hansen recently commented - the climate agenda is not amenable to half measures. “It would be like saying, I’ll agree to cut 40% of slavery.”

Bang it on the table, Gordon!

The Guardian has it that the EU is once again stalling on adaptation finance being additional to aid (see previous Climatico posts on this issue here and here). Someone has forwarded them “confidential papers” where key lines of negotiating text have been removed. Apparently it says, “Cannot accept reference to ‘additional to’, and ’separate from’ ODA [official development assistance] targets.”

This has of course brought howls of complaint from the development NGOs, who argue, rightly in my opinion, that adaptation finance is a justice issue. Climate change was mostly caused by rich countries, the argument goes, and so any costs that poor countries incur in adapting to it should be financed by rich countries. Meles Zenawi (Ethiopia’s PM) puts it best, saying,

“[Climate change] has created a more hostile environment for development. No amount of money will undo the damage done. But adequate investment in mitigating the damage could partly resolve the problem. … Developed countries are thus morally obliged to pay partial compensation to poor and vulnerable countries and regions to cover part of the cost of the investments needed to adapt to climate change.”

Aid has completely different objectives (as well as different political economy questions around it), and should be protected from mission creep. Developing countries have consistently argued that a fair deal on finance is necessary for them to accept anything on the table at Copenhagen. If they are to get no additional funds, they might walk, and rightly so.

International Development is one of the few areas in which Gordon Brown still claims moral authority. He has banged his “big clunking fist” on the table before, to prevent rich country backsliding on development assistance - let’s hope he does it again. What he proposed last year is the least worst option - it acknowleges that adaptation and development do cross over to an extent, and therefore promises that 90% of adaptation finance from the UK will be additional to ODA. Along with the £10bn global fund he annoucned on Friday, this provides a useful framework for the EU.

 EU leaders failed to agree on a financing proposal for developing countries after their two-day summit this week, leaving the EU’s negotiating position on the issue open-ended.

A Kenyan riverbed: developing countries are expected to bear the brunt of climate change because of their geography and their lack of capacity to adapt to change (Image: Matt & Kim Rudge @Flickr)

In a set of conclusions that were long on rhetorical concern about accelerating climate change but short on any new commitments for the EU, the European Council effectively endorsed the views set forth in the Commission communication on funding that I discussed a few weeks ago. This means that the 27 Member states have agreed a common view of the amount of funding required for adaptation and mitigation in developing countries – €100bn annually by 2020 – but not over how much of this should come from the EU and its members.

One of the reported reasons for the failure to reach an agreement is reported to be, as usual, down to differences between the richer and poorer members of the EU. A coalition of East European countries allegedly resisted specific commitments due to concern over their ability to afford the proposals. But the BBC also reported differences over negotiating strategy as a cause for the ambiguity of the Council’s position. Germany, it is suggested, believed that providing an explicit figure would provide less of an incentive for other developed countries to make similar commitments.

How much the EU is really willing to pay for climate change mitigation and adaptation in developing countries, then, remains to be seen. But the failure of EU leaders to establish a common position underlines the political difficulty associated with large transfers of wealth to countries whose citizens don’t vote in European elections.

Mont-Saint-Michel, on the Normandy coast of France, is the sight of new conflict.  The most recent battle is not in a medieval setting, but a modern struggle against two good, but opposed environmental causes.  On one side are those who want to reduce carbon emissions by installing windmills.  On the other side stand ecologists who suggest that windmills churning above the tidal flats of Mont-Saint-Michel would distract from the natural beauty of the medieval monument and potentially destroy the landscape in the future.

France is on an ambitious route to expand its use of windmills in renewable energy.  Currently there are 2500 windmills producing 4500 megawatts per year; the goal is to have 8500 windmills producing 25000 megawatts by 2020.  Windmills are becoming increasingly sought after by EU goals to limit greenhouse gases.  Last week, the EU recommended that it invest $ 70 million in clean energy over the coming decade, tripling windmill construction to produce 20 % of Europe’s electricity.

Those against the windmills near Mont-Saint-Michel have nothing against the quest for clean energy but rather argue that windmills above the ridgeline are not the way to achieve this goal.  Allies have formed across France, and an ambitious campaign to prove the windmills would desecrate the vista has begun.

The mayor of Mont-Saint-Michel, Eric Vannier, has stayed out of the debate for the most part, but 600 locals have pooled finances to hire lawyers to sue local government.  They expect a court ruling in Spring 2010.  If the group wins the lawsuit, “they’ll have to put everything back beyond 30 km (~18.5 miles),” said Corinne Gressier, who runs the group “Windmills: Turbulences.”  But she also realizes, “if we lose, it’s over.”

French law bans windmills closer than 1500 feet from historical monuments.  The current court case in will be on trial in Nantes.  It concerns plans to build 300 foot high windmills on farmland in Argouges, on a plateau a bit more than 10 miles southeast of Mont-Saint-Michel.  The monument attracts about 3 million visitors each year to admire the rock-top monastery.  Andre Antolini, president of renewable Energies Syndicate, told reporters last month that, “at the proposed distance, tourists to the monument would only see tiny blades peeking over the horizon.”

But for protesters like Gressier and the national alliance of environmental groups, the three windmills at Argouges would just be the tip of the iceberg if building is permitted.  There are current plans for an additional 80 towers in farming communities across the entire ridgeline above Mont-Saint-Michel.

The complicating issue is that farmers and village counters tend to embrace proposals to install windmills in their fields because of the payments they receive.  They get stipends for use of the land and villages are provided tax revenue on income from electricity, which is sold to the national grid.  “It’s a flourishing business,” said Jean-Louis Butre, president of the Durable Environmental Federation, based in Paris.

At present France gets about 80 percent of its energy from nuclear reactors and an additional 12 percent from hydraulic generators.  That leaves a balance of 8 percent that must be filled by oil, coal, natural gas, solar, or wind.  Butre explains that if government decided to fill that gap with windmills, it would have so many that they would be part of the scenery in more than a third of the country.

In fact last year, Butre challenged president Sarkozy’s strong push for wind energy in the book “Fraud: why windmills are a danger for France.”  The former President Velery Giscard d’Estaing, a supporter for nuclear power, wrote the preface to the book.  He denounced windmills as an “unacceptable use of public funds, a deceptive public discourse, and often questionable business.”

Now the delegation from Argouges, with support from groups around France, waits to see if they will win the court battle and put atop to the windmill construction near Mont-Saint-Michel.  It remains to be seen how this part of Mont-Saint-Michel’s represents 13 centuries of history will play out.

This month, the European Commission published development roadmaps for seven key low carbon technologies. Thy relate to wind, solar, bioenergy, CCS, nuclear technologies, as well as smart grids and energy efficiency, for the period 2010 and 2020. 

There is a long-standing policy debate over how best to spur innovation in low-carbon technologies. One option is to let markets ‘pull’ technology development along. According to this reasoning, if governments ensure there is a credible price for CO₂ and other greenhouse gases, then companies will start to develop new technologies with lower emissions in response to this market signal. The other possibility is for governments to use a policy ‘push’ and pay directly for early-stage R&D into new and promising technologies.

The roadmaps follow the publication of a EU Strategic Energy Technology Plan in 2007. It outlined a vision where the EU enjoyed global leadership in a range of low-carbon technologies. Each roadmap has been developed by the Commission in consultation with the relevant industries, and attempts to describe, step by step, how each technology should develop over the next decade in order to fulfil the vision of the SET Plan. Development in each of the technology areas is backed by an European Industrial Initiative, which is a public-private partnership working in each of the low-carbon technology areas.

In practice, governments usually opt for a combination of the two. The SET Plan was the EU’s policy push for low technologies, accompanying the market pull of the carbon and renewable energy targets included in the Climate and Energy Package it unveiled in the same year.

While the Climate and Energy Package and its 20/20/20 targets have successfully made it into EU law, the SET Plan has arguably been somewhat neglected by comparison. The Commission’s new communication implicitly acknowledges this by speaking of the need for the SET Plan now to be ‘taken forward to implementation’.

But implementation costs money and, critically, the Commission’s new roadmaps don’t come with any new funding plans attached. The Commission calls on Member States to dig deeper into their own pockets to fund energy R&D – a recommendation that is unlikely to receive a warm welcome from treasuries across Europe as they seek to recover their battered public finances – and proposes to use the European Investment Bank’s lending power to fund research in promising areas.

The communication also refers to the role of other countries in developing low-carbon technologies. As with other areas of international climate negotiations, there are large inequalities in the distribution of low-carbon innovation. While the EU can justifiably point to its global climate leadership committing early to substantial emission reductions (at least, compared to other developed countries), the US is leading the pack in terms of its expenditure on developing low-carbon technologies, from biofuels to smart grids. A number of international negotiations are in progress to improve coordination between developed countries and sure that they all pull their weight when it comes to energy R&D; another set of negotiations again are discussing how developing countries can access these new technologies.

As reported by EurActiv, it is not only global cooperation that lies behind the SET Plan: there is something of a technology race occurring between different developed countries, with potentially large future gains available to countries who lead the development of new low-carbon technologies. The IEA this week released its technology road map for CCS that envisages an investment of US$6 trillion by 2050. Companies who are successful in developing CCS technologies now will be able to profit from this economic activity in future. Similar arguments apply to other low-carbon technologies like renewable generation and low-emissions vehicles.

There is no question that low-carbon technologies will be vital during the twnty-first century: without them mitigating climate change will be intolerably expensive. How many of those technologies will be European in origin depends in no small part on whether the Commission succeeds in finding R&D funding at a scale that matches its R&D vision.

Climatico’s entire European Union team (me) has been away on holiday recently, and on my return I find that I’ve missed an eventful couple of weeks. The credibility of both the EU’s domestic climate policy and its international commitments has been dealt a couple of blows, one by a Commission publication on climate financing for developing countries and another by a European court ruling.

EU flag (Source: openDemocracy: Flickr)

Developing country financing first. As Ian Ross wrote in a - dare I say it - grumpy post in March 2009 there are longstanding disagreements within the EU over how much money it should give developing countries to help them mitigate and adapt to climate change. Back then, the EU’s environment ministers were beginning the process of trying to reach agreement over the funding they would commit to adaptation.

Now the Commission has set out its view of how developing country financing could work under an international agreement, and provided an indication of what it sees as an appropriate scale for the EU’s contribution. In its communication, the Commission adhered to its long-standing view of the amount of money that needs to be spent in developing countries by 2020 - €100bn every year. But its proposal for how much of this should come from EU funds disappointed NGOs including Oxfam, WWF, and Greenpeace. The amounts it proposed fall short of their expectations and - more revealingly - are short of the figures seen in a draft of the same document leaked the previous week.

Financing for developing countries is one of the four key areas identified by Yvo de Boer recently as crucial to a successful climate agreement. The Commission’s publication may help to provide a framework for negotiations over this topic. But its lack of ambition underlines the difficulty of resourcing climate mitigation and adaptation abroad at a time of severe public finance constraints - even for countries that are willing to commit substantial resources to reducing emissions at home.

Meanwhile, the EU’s flagship policy for reducing European GHG emissions found itself at the wrong end of a critical judgment from the European Court of First Instance last week. The court sided with Poland and Estonia in a dispute over the Commission’s role in evaluating their National Allocation Plans (NAPs) for carbon emissions for the period 2008-2012.

The background to the case is that the Commission rejected the NAPs originally proposed by these two countries for this period, and revised them downwards. The Commission’s power to review NAPs exists so that countries aren’t too generous in their allocations - this should avoid a price crash of the sort seen during the experimental first phase of the EU ETS. The Court’s judgment found that the Commission’s grounds for rejecting the NAPs weren’t legally valid and has annulled the Commission’s decision.

Although the prospect of a possible loosening of the cap sounds alarming, there are a few reasons to think that this won’t crash the carbon price. One is that the Commission will appeal the decision, dragging out the legal process and delaying any reversal until 2010 or even beyond. Even if the appeal is unsuccessful, Member States won’t have free rein to determine their own NAPs - they will still be subject to the Commission’s scrutiny. And the fact that certificates can be banked and used in the third Phase of the EU ETS, which runs from 2012 to 2020, should allow some of the excess certificates (if there are any) to be absorbed in those later years. But this is an unwelcome distraction all the same, especially at a time when weak demand for energy has already depressed the value of carbon allowances.

Swedish Prime Minister Fredrik Reinfeldt (Photo: Pawel Flato)

Two key members of the Swedish government – the Prime Minister and the Environment Minister – appeared last week to adopt contrasting tones when commenting on the EU’s expectations of other parties at the forthcoming climate negotiations in Copenhagen.

Sweden currently holds the EU’s rotating Presidency, and over the last few months it has been outlining the bloc’s position on the Copenhagen negotiations that will take place later this year. Much of what the Swedish ministers said has followed the broad outlines of the European Commission’s January communication on a global deal – significant absolute cuts for developed countries, reductions compared to business-as-usual for developing countries, and reform of the CDM.

As recently as last week the Swedish Environment Minister, Andreas Carlgren, repeated similar opinions in a press conference. He described the proposed climate legislation currently being debated in the US as promising, but not ambitious enough. He also called on large emerging economies to be prepared to reduce their emissions by as much as 30% below business-as-usual projections.

Meanwhile, Swedish Prime Minister Fredrik Reinfeldt was reported to have indicated that a less exacting set of commitments could be sufficient for an international agreement. The Prime Minister echoed Minister Carlgren’s view that the positions expressed by both the US and major developing countries were not satisfactory. However, he also went on to suggest that Europe needed to be ‘open to other types of solutions’ besides binding targets, including special terms for China and theUS.

Without seeing the full interview with Prime Minister Reinfeldt it is difficult to know exactly how different the substance of his comments was from the Environment Minister’s. But the difference in tone underlines the nature of the EU’s role in this year’s negotiations.

During the build-up to last year’s Poznań conference all eyes were on the EU as it tried to finalise its politically ambitious Climate and Energy Package. By committing itself back then to a 20% cut in emissions by 2020, it has deliberately played its hand early. Its role (at least in public) is now effectively limited to maintaining political pressure on other countries to follow suit, and trying to retain its reputation as a global leader on climate change.

This may go some way to explain the Swedish Ministers’ good cop / bad cop stances last week: the EU is on one hand eager to articulate an ambitious vision for a global deal, while also pragmatically laying the ground for a compromise position if (or, rather, when) China and the US fail to offer what the EU has previously said it wants of them.

Europe will not have the leading role in this year’s drama at Copenhagen – China and the US will be centre stage instead. But there is no doubt that the EU’s Swedish Presidency will want to ensure that it continues to be seen and heard all the way to the final act.

… but doesn’t agree on when to turn down the heat. This is Oxfam’s resumé on the freshly released G8 climate change communiqué. Leaders could not improve on last year’s commitment of “a 50% reduction of global emissions by 2050”. They did however agree that to reach such a global reduction, developed countries will have to reduce their emissions by 80% by 2050. There was no agreement on a specific year as a baseline, and the final wording - “compared to 1990 or more recent years” - reflects the disagreement between the EU who pushed for a 1990 baseline and the USA and Japan who want future emissions to be compared to a more recent reference year.

As hoped and expected, it was agreed, however, that “the increase in global average temperature above pre-industrial levels ought not to exceed 2°C.” This is the first time that the US has officially agreed to such a target, something that would have been unimaginable under George W. Bush. The Canadians were opposed to this statement earlier this week, but after long negotiations and NGO campaigns from the likes of Avaaz, Canada accepted the language.

Like last year, no interim goal has been agreed on, though the EU’s push for a 2020 goal is reflected in the statement that a 50% reduction by 2050 “implies that global emissions need to peak as soon as possible and decline thereafter”. This lack of an interim target does not sit well with a 2°C target as Kim Carstensen, leader of the WWF Global Climate Initiative, puts it: “What are [world leaders] going to do between now and 2020? If they don’t outline a path to reach the announced goal, the 2 degree statement will just join a long list of broken promises.”

In the short term, they will be working on their economic recovery. The deterioration of the economic climate is noticeable throughout the document. Yet, positively, the trend to “green” individual stimulus packages (at least rhetorically) has been picked up in the communiqué: “We must seize the opportunity to build on synergies between actions to combat climate change and economic recovery initiatives, and encourage growth and sustainable development worldwide.”

For those interested in adaptation and forestry, the document seems to have something on offer.  The document mentions the “possible security implications of the adverse impact of climate change and the potential for increased conflicts over scarcer resources.” It goes on to discuss not only deforestation but also land degradation and the importance of biodiversity.

The bottom line is that apart from the lack of interim targets, most NGOs and other observers agree that the communique is adequate. Or as John Kirton, of the G8 Research Group, put it - “It met my standards.”

The G8 leaders will now take this communique to the Major Economies Forum tomorrow.  There Obama will chair a difficult meeting in which he will attempt to reverse China and India’s longstanding opposition to adopting quantitative emissions targets.

By Ruth Brandt, Niel Bowerman and Marie Karaisl

The second two-week round of UN-led climate talks, held in Bonn, met with some critical feedback, though there were notable highlights in the dialogue.  One such highlight was the pitch four of the world’s largest air carriers made for a worldwide emissions limit for all airlines as part of the deal to be reached in Copenhagen this December.

The Aviation Global Deal Group (AGD), which includes British Airways, Cathay Pacific, Air France/KLM and Virgin Atlantic, presented what they deem an “ambitious, equitable, and effective” regime of emission caps for all airlines.  This proposal is an effort to include the industry in a climate treaty that 192 nations aim to agree upon this December.  The UN estimates that airlines account for about 3 % of global emissions.  The airline industry has not been subject to GHG regulations up to this point.

Executive secretary of the UN’s climate-change agency, Yvo de Boer, does admit that “it’s very hard to say if aviation will be included” in a final agreement in Copenhagen.  Regardless, airlines are expected to be included in EU regulations in 2012.  The USA has also proposed future legislation on airline CO2 output.  The AGD specifically discussed capping carriers’ GHG output based on annual fuel purchases.  Companies overshooting their target would have to buy permits from those emitting less than their allocation.  Revenue from auctioned permits would go towards helping developing countries adapt to climate change and developing cleaner air travel technology.

Yet, the Bonn talks were described as yielding little true consensus. France’s climate ambassador, Brice Lalonde, said that compared to previous sessions, in Bonn “the attitudes were more constructive, but the level of ambition was lower.”  His specific criticism was that it is now commonly accepted knowledge that global emissions have to be halved by 2050 (compared with 1990 levels), implying an 80 % reduction by industrialized countries. It is also generally agreed that the emissions levels in developing countries must start falling by 2025 at the very least.   But in Lalonde’s opinion, “no one is signing up” – in which statement he is also rather critical of the EU’s involvement.

The driving issues, such as who should cut their emissions and how soon, as well as the question of technology transfer to poor countries, require specific road mapping exercises – for example the proposal by the AGD.  Just last month in a major meeting in Paris (reported in a previous Climatico article), representatives from France and Germany were ardent in their call for flexibility in the mechanisms by which climate change mitigation occurs, so long as it does indeed occur.  Perhaps it will be industry partnerships of multi-national firms that ultimately pushes – or flies—  climate change negotiations over this precarious negotiation standstill?

European Parliament building in Strasbourg, France (Image: Andreas Tille - http://commons.wikimedia.org/wiki/User:Tillea)

Today sees the start of voting in the election of the European Parliament for the next five years. The Parliament is sometimes described as institutionally weak – a passive, reactive body unable to form legislative proposals of its own. But this is to understate the significant role that it can play in forming European legislation, including climate legislation.

The Parliament is the only European institution to be elected directly by EU citizens. This year the voting is taking place over four days, beginning with the UK and Netherlands, but the results will be made public only after all polling booths have closed on Sunday evening.

The other main European institutions are the Commission and the Council. The Commission is appointed by Member State governments, and the Council is made up of the heads of Member State governments. These institutions can interact in several different ways in order to create legislation, and the amount of influence the Parliament has varies depending on the policy area under consideration. Broadly speaking, though, the Commission is the body that determines the policy agenda by proposing new legislation, and the Council has the final say on whether the proposals become law. The Parliament can influence legislation after it is proposed by the Commission and before its final approval by the Council – hence the suggestion that it is the weakest of the three institutions.

But this doesn’t mean that its role is insignificant.

Consider the new EU Emissions Trading Directive, for example, which was proposed as part of the Climate and Energy Package, was amended and discussed extensively by the Parliament before the Council met in December 2008 to hammer out the final details. This meant that Irish MEP Avril Doyle had a crucial role in shaping the debate over contentious issues such as leakage and allocation or allowances, because she had the task of steering the draft legislation through Parliament.

Another important figure is Chris Davies, MEP, who played a pivotal role in ensuring that a multi-billion Euro package of funding was dedicated to the development of Carbon Capture and Storage plants. This will allow testing of CCS on a scale that should indicate whether these technologies can make a significant contribution to emissions mitigation in decades to come. Though it was a proposal made by the Commission at the beginning of 2007, it failed to attract support from Member States during that year. As a result, the idea barely featured in the Commission’s proposals at the beginning of 2008. It was at this stage that a campaign to secure the funding began in the European Parliament, and without this it’s almost completely certain that the billions that will now be available for CCS would not be there at all.

It is difficult to predict what effect these elections will have on the EU’s climate policy in future. Political allegiances and voting patterns in the European Parliament consist of a complex mixture of political groupings, national solidarity and individual Members’ interests and priorities.

Some experts do not predict a significant change in the party-political make up of the Parliament, But the influential role of a individual MEPs in shaping the Directives in the Climate and Energy Package suggest those who will be voted in to the Parliament over the coming days could have a profound impact – for better or worse – on EU climate policy in the decade to come.