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Monday, March 31, 2008

Climate in Europe this month

In news this month:

  1. Major firms agree on 2050 climate target
  2. Global carbon market set to explode in the next decade
  3. The pondering of EU on the labeling of greener products in two parts
  4. Shipping not so harmless for Nature as thought.

Major firms back 2050 climate change target

18 February 2008

Sony, Nike, Nokia and nine other multinational companies have signed a declaration in support of a 50% reduction in global greenhouse gas emissions by 2050, echoing similar calls being made by UN scientists and EU leaders during international climate negotiations.

The Tokyo Declaration, signed in the Japanese megalopolis on 15 February, supports the Inter-governmental Panel on Climate Change (IPPC) in its assessment that "global emissions of greenhouse gases (GHGs) need to peak in the next 10–15 years and be reduced to very low levels, well below half of the levels in 2000, by the middle of the twenty-first century".

The non-binding declaration includes a voluntary pledge to "widen the scope of emission reduction activities in partnering with our business partners" to improve consumer habits and "enhance the transparency of our carbon footprint and related reduction activities".

It is the latest in a series of corporate-level commitments related to climate change.

WWF's Climate Savers programme, for example, is a private sector/NGO partnership that involves firms like IBM, Lafarge and Johnson & Johnson which have pledged to reduce their CO2 output by 10 million tonnes per year by 2010.

Global business leaders also promised to "step up to the plate" on climate change during the 21-26 January World Economic Forum in Davos, and on 12 December 2007 nearly 350 global firms chimed in to the Bali climate talks, calling for a post-2012 climate change deal to replace the Kyoto Protocol.

Major European companies will discuss the impact of climate change and energy issues on their businesses during the 21-22 February European Business Summit (EBSexternal ) in Brussels.

Despite this flurry of activity, a recent survey by the consulting firm McKinsey found that many firms are not translating their growing attention on climate change issues into core strategic action, despite increasing awareness of the potential opportunities for profit-making (EurActiv 18/02/08).

The lack of predictable and harmonised regulations may be partly to blame for a lack of concrete corporate engagement.

Meanwhile, electronics manufacturer Philips announced that its sales of 'green products' had increased by one third between 2006 and 2007.source

Global carbon market set to explode in next decade

19 February 2008

Analysts foresee a boom in carbon emissions trading by 2020 as the EU prepares to include new sectors in its Emissions Trading Scheme (EU-ETS) and the United States' accession to a similar system appears increasingly inevitable.

The European carbon dioxide cap-and-trade scheme has so far enabled member states to achieve more than a 2% cut in CO2 levels compared to 1990, and is expected to achieve far greater results once a new beefed-up system enters into force in 2013 (EurActiv 23/01/08).

Yet, the biggest challenge of the Commission's proposed climate strategy is to bring all major world emitters of global-warming gases - including the US and emerging economies such as China and India - into similar binding pollution-cutting schemes.

The value of the global carbon market shot up by 80% in 2007, with some 2.7 billion tonnes of CO2 credits, worth €40.4 billion, changing hands, in a sign of growing enthusiasm for the carbon trading industry among companies and investors worldwide, according to research by independent analysis and consulting firm Point Carbonexternal .

Around 60% of this trading took place through the European Union's Emissions Trading Scheme (EU-ETS), with 1.6 billion tonnes of carbon emissions, worth €28 billion, changing hands in the bloc.

The UN-administered Clean Development Mechanism (CDM), which allows companies to meet part of their emission reduction targets by financing carbon-cutting projects in the developing world, accounted for a further 947 million tonnes of carbon dioxide, worth €12 billion.

Analysts further believe the global carbon market could see a veritable boom in the next 12 years, especially if the US steps in.

What's more, with 13 climate change bills currently under discussion in the Democrat-led Congress – most of which contain plans for some sort of market-based mechanism – analysts believe it is unlikely the US will escape entering into an emission reduction scheme in the future.

The US is unlikely to agree to any scheme that does not require its major trading partners from the developing world, such as China, Brazil and India, to abide by emissions regulations as well. As US Senate committee chair Max Baucus explained: "In the context of a competitive economy, they cannot enjoy a free ride while we bear the cost."

The EU is also more than eager to create a level global playing field for its businesses in order to avoid the so-called "carbon leakage" phenomenon, where companies relocate to third countries with less stringent climate protection laws in order to remain competitive.

What's more, India and China could also see their participation in the carbon market limited if they fail to ratify a global deal. Indeed, while currently, around 10% of carbon credits purchased by EU companies are Clean Development Mechanism or Joint Implementation credits, the Commission is suggesting limiting this to 5-6%.

Even if other nations level the playing field by applying a carbon trading mechanism similar to the EU ETS, many fear that Europe's global competitiveness would still suffer as the carbon-intensity of EU exports is higher than those of China, the US and other exporters.

A key tool in addressing this issue could be the conclusion of international sectoral agreements, under which energy-intensive industries would be allowed to operate under a separate carbon regime, based on targets agreed among themselves, effectively sheltering the sector from a severe increase in operating costs related to clean technology upgrades or the purchasing of emissions credits from projects in developing countries.

Under such a scheme, major developing countries such as China would pledge to achieve a voluntary sector GHG intensity target (e.g. GHG/ton of steel) and would receive technology incentives from developed countries in exchange.

The idea has been backed by EU Industry Commissioner Günter Verheugen and the EU's High Level Group (HLG) on Competitiveness, Energy and Environment as a means of delivering fair competition while continuing to ensure clean technology improvements in developing countries. Such a scheme could also receive backing from the US and Japan, which are both against strict binding goals. source

EU ponders greener products and consumer habits

The Commission has repeatedly delayed publication of its sustainable consumption and production strategy, an indication of the difficulties the EU executive faces in defining its approach to a highly complicated issue that affects a wide range of consumer groups and industry sectors.

'Greening' the way products are produced and consumed is a challenge the Commission sought to address in its 2003 Integrated Product Policy (IPP) proposal.

But the IPP has been criticised both by NGOs, who argue the policy lacks teeth since it contains no legislative provisions, and businesses, who say its focus on the environment is too narrow and that it should be up to business rather than public regulators to ensure the sustainability of products.

Partly in response these criticisms, the Commission consulted stakeholders and has begun formulating action plans on sustainable consumption and production (SCP), prepared by DG Environment, and on a sustainable industrial policy (SIP), prepared by DG Enterprise.

Originally scheduled for publication in December 2007, the Commission's SCP and SIP strategies may now be published in the middle of April, although no definite date has been set, according to a Commission spokersperson.

The proposition that are being considered:

  1. a 'carbon label' indicating the amount of CO2 emitted during the manufacture of a given product, for example, was strongly criticised by the food industry and consumer groups.
  2. Adoption of Japanese-style system whereby producers in various sectors are presented with a specific deadline to match the energy perfomance of a best-performing manufacturer were also criticised as being unsuitable for the European context.
  3. The EU's eco-labelexternal scheme may also be extended to other products, but stakeholders disagree on the best criteria and methodology to apply to further labelling schemes.
  4. Tax incentives for cleaner yet more expensive goods can get a foothold on the market.

Tax incentives are commonly used to stimulate the development goods such as energy efficient appliances, cleaner cars, or renewable energies. But coordinating national tax policies at European level is difficult.

A recent joint proposal by the UK and France in favour of reduced (and harmonised) VAT rates for green goods and services, for example, did not receive broad support from other member states, which must agree on such measures unanimously (EurActiv 13/11/07).

The issue of incentivising cleaner consumption habits will be the focus of a 22 February session at the European Business Summit (EBSexternal ). source

Doubts raised over labels for 'greening' consumption

25 February 2008

Labelling schemes designed to shift consumer preferences towards more ecologically-friendly goods have had a limited effectiveness and need to be used in combination with other measures, according to panellists who debated the issue during a recent EBS workshop in Brussels, moderated by EurActiv.

To date, there has been little spillover from niche markets for more environmentally-friendly goods into the wider retail sector, according to Jim Murray, former director of the European Consumers' Organisation BEUC.

Murray, who addressed the issue along with other panelists during a 22 February debate at the European Business Summit (EBS) in Brussels, said that schemes like the EU's eco labelexternal have been "disappointing" in terms of their impact on purchasing patterns.

Consumers are also being confused by a proliferation of environmental claims that have become "meaningless", he said.

Concerns over excessive use of different labels were also echoed by Roland Vaxelaire of the Carrefour Group. Vaxelaire argued that companies need more support in order to reduce prices for greener goods, and that while labels are important, customers should not be confused and made to feel guilty.

The Commission is currently planning a revision and possible expansion of the eco label scheme as part of a new action plan on sustainable consumption and production (SCP), expected in mid-April (see also EurActiv 21/02/08).

All the panellists agreed that labels can be useful as long as they are based on consistent and easy-to-understand criteria, and are used in combination with other measures. Differing views emerged on fiscal incentives, however.

Murray noted that tax breaks have not been as successful as expected, citing a 2006 studyPdf external by the UK's Sustainable Development Commission.

Erika Mink of Tetra Pak urged "caution" on the use of taxation, while former EU Agriculture Commissioner Franz Fischler spoke in favour of higher taxation on resource use, offset by decreased taxes on income. Fischler also argued that the market should play a greater role in creating incentives for cleaner consumption patterns.

During a separate debate at the EBS, EU Enterprise and Industry Commissioner Günther Verheugen indicated his support for incentive-based rather than prescriptive measures to stimulate more sustainable industrial production. The Commission will present an action plan on sustainable industrial policy (SIP) alongside the SCP action plan. source

UN says shipping emissions 'grossly underestimated'

13 February 2008

Carbon dioxide emissions from shipping – one of the few sectors still not covered by EU climate change measures – are likely to be three times worse than currently thought, according to a leaked report by the UN's Intergovernmental Panel on Climate Change (IPCC).

Shipping has thus far been spared having to make any significant cuts in carbon dioxide emissions as the sector was left out of the Kyoto Protocol and, thus, out of the EU's Emissions Trading Scheme (ETS).

What's more, while draft European legislation, presented in January with the aim of strengthening the ETS and extending it to new industrial sectors, provides for aviation to be included in the EU's carbon cap-and-trade scheme as of 2013, shipping remains excluded from the proposed directive's scope.

The figures in the report, seen by The Guardian, are based on recalculations carried out by Intertanko, the International Association of Independent Tanker Owners, according to which global shipping operations are responsible for emitting 1.2 billion tonnes of CO2, equivalent to 4.5% of worldwide emissions. This represents three times more than current estimates of 400 million tonnes, but also twice as much as the 650 million tonnes said to be emitted by aeroplanes.

The new calculations, which are thought to be more precise than earlier ones as they take into account not only the quantity of low grade fuel bought by shipowners but also the size of ships, their fuel efficiency and horse power – cast fresh doubts over the Commission's decision not to include shipping in its emissions trading scheme after 2013 (EurActiv 23/01/08).

The report further finds that CO2 emissions from shipping are likely to increase by a further 30% by 2020 and that other pollutant emissions such as nitrogen (NOx), particulate matter (PM) and sulphur oxides (SOx), which are responsible for acid rain and respiratory problems, could rise even more than that if no action is taken.

The International Maritime Organisation (IMO) last week finalised proposals for reducing air pollution from ships, but these still have to be rubberstamped by members in October, at a meeting of the organisation's Marine Environment Protection Committee (MEPC).

source
My comment: My over-all impression on these news is the EU still lacks the will and strength to enforce measures that will have a real effect. The good part is that obviously it doesn't lack entirely support from big companies.

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