Issues and challenges

Financial and economic crisis – the disclaimer

Boundary conditions Implications

◦ The ten issues Country level considerations Conclusion

International processRegime models/lessonsThe EU setting

International negotiations◦ Road behind◦ Road ahead

Questions to answer: What is the appropriate scale of ambition? What are the most efficient mechanisms for achieving

the agreed objective? Which country-by-country commitments and actions

would represent a fair and equitable outcome?

Source: Greenhouse gas reduction pathways in the UNFCCC process up to 2025. CNRS/LEPII-EPE (France) − RIVM/MNP (Netherlands) − ICCS-NTUA (Greece) − CES-KUL (Belgium), October 2003

2025 2050

The EU setting – the „without” package and the „with” vision

„With”: Agreed commitment targets for Member States should be

adjusted to be consistent with the higher international target The proposed changes should allow for Member States to use CERs,

ERUs or other approved credits from projects in third countries Allows for transfer of unused quantity of carbon credits between

Member States Opens the possibility to use other, not specified future

measures for emission reduction, mechanisms, credit types created under the international agreement

The Commission will make proposal on the inclusion of LULUCF activities in the EU emission reduction commitments

The scenario will allow for operators to use addition credits from third countries (CER, ERU etc) and additional types of project credits in the EU emission trading system

Proposed building blocks by the European Commission:◦ Financing◦ Emission reduction target◦ Global carbon market

The ten issues

Emission reduction needs in the “with” scenario◦ EU bubble◦ ETS sectors – Community „control”, but MS

implications◦ Non-ETS sector – national policies

Scenario for 30 % reduction◦ NMSs usually overestimate emission growth◦ Details later

Managing the long term transition◦ Two phases of transition◦ Whene will phase 2 come?◦ Naive advise

Modalities of long-impact technologies◦ Carbon capture and storage◦ Nuclear power generation

Usage of carbon credits from developing countries◦ Getting late to the game◦ What does the Ministry of Finance thinks?

AAU surplus/banking◦ What will be the rules of the game?

AAU levy? Banking for what? – implications for GIS now

Carry forward policy◦ Carbon budgeting, systematic carbon policy

Energy poverty◦ Measures to avoid

Financing climate activities in developing countries

Energy security ◦ The dilemma of energy mix◦ The obvious of energy efficiency

  BU CZ EE HU LT LV PL RO SK SI NMSsGDP based     19,8        90,6   

   10,0        80,2   

   11,8      18,9   

  220,9        72,1      34,8   

   26,0         585,0   

Emission based 135,3 281,4 40,5 155,0 21,0 43,6 771,1 297,0 92,5 39,2 1876,7

General observationsThe numbers to anticipateNuclear

      BU CZ EE HU LV LT PL RO SK SI NMSsEU-27

ETS/total emissions in 2005 58% 57% 60% 32% 27% 29% 51% 46% 53% 43% 49% 41%

reduction

ETS domestic  -35%-

36%-

37%-

30% -9%-

34%-

17% -2% -1% -35% -21% -21%with CER etc. -50%

-51%

-52%

-45%

-24%

-49%

-32%

-17%

-16% -50% -36% -36%

non-ETStarget 11% 1% 3% 2% 9% 7% 6% 10% 5% -3% 5,5%

15,8%

cost efficient (domestic) -19% -7% -3% -6% 24% -2% -2% -1% -1% 7% -4,5%

15,8%

total"target" -24%

-29%

-30%

-13% 0% -9%

-14% -2% -6% -24% -15% -24%

cost efficient (domestic) -28%

-24%

-24%

-14% 15%

-11%

-10% -2% -1% -11% -13% -14%

4th NC total

with e.m./BAU 50%

-19%  - 16% 56% 36% 30% 52% 43% 0% 27%

with a.m. 34%-

21%  - 8% 29% 9% 20% 45% 36% -6% 18%

Slovenia GHG emissions(in Mt CO2eq)

0

5

10

15

20

25

base

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005 KP KP KP KP KP

2020

ETS covered bycredits

ETS covered by EUA

Non-ETS target

Non-ETS additionalemission mitigationpotential

Bulgaria GHG emissions (in Mt CO2eq)

-20

0

20

40

60

80

100

120

140

base

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005 KP KP KP KP KP

2020

ETS covered bycredits

ETS covered by EUA

Non-ETS target

Non-ETS additionalmitigation potential

Plans in most of the NMSs to have future use of nuclear◦ Life time extension plans◦ New nuclear units planned

Social consensus?

Long term pathway for low carbon society? (i.e. well founded and practical climate and energy policy...)