# C_2006185EN.01006201.xml

| 8.8.2006 | EN | Official Journal of the European Union | C 185/62 |
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8.8.2006

EN

Official Journal of the European Union

C 185/62

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Opinion of the European Economic and Social Committee on The effects of international agreements to reduce greenhouse gas emissions on the industrial change processes in Europe

(2006/C 185/12)

On 10 February 2005, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an opinion on: The effects of international agreements to reduce greenhouse gas emissions on the industrial change processes in Europe.

The effects of international agreements to reduce greenhouse gas emissions on the industrial change processes in Europe.

The Consultative Commission on Industrial Change, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 30 January 2006. The rapporteur was Mr Zbořil and the co-rapporteur was Mr Činčera.

At its 426th plenary session held on 20 and 21 April 2006 (meeting of 20 April), the European Economic and Social Committee adopted the following opinion by 79 votes to 11 with nine abstentions.

1.   Introduction: the EU's goals in the reduction of greenhouse gas emissions

| 1.1 | Global climate change is currently one of the most important subjects in scientific and political discussion and action, as well as in everyday life. International activities initiated at the turn of the 1980s and 1990s led first to the establishment of the Intergovernmental Panel on Climate Change (IPCC) in 1989, then to negotiations being initiated at UN level (1990) and finally to the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, which came into force on 21 March 1994. |
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1.1

Global climate change is currently one of the most important subjects in scientific and political discussion and action, as well as in everyday life. International activities initiated at the turn of the 1980s and 1990s led first to the establishment of the Intergovernmental Panel on Climate Change (IPCC) in 1989, then to negotiations being initiated at UN level (1990) and finally to the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, which came into force on 21 March 1994.

| 1.2 | Climate change did occur in the distant past, though we have only indirect evidence of this (proxy data) in the form of paleoclimatic measurements and observation or of geological phenomena and archaeological findings, as there are no reliable meteorological data from that time. New analyses of proxy data for the Northern Hemisphere indicate that the increase in global temperature in the 20th century is the largest of any century during the past 1 000 years. |
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1.2

Climate change did occur in the distant past, though we have only indirect evidence of this (proxy data) in the form of paleoclimatic measurements and observation or of geological phenomena and archaeological findings, as there are no reliable meteorological data from that time. New analyses of proxy data for the Northern Hemisphere indicate that the increase in global temperature in the 20th century is the largest of any century during the past 1 000 years.

| 1.3 | Many states and regions that are vulnerable to climate change are also under pressure from forces such as population growth, resource depletion, and poverty. A policy, and measures based on it, formulated with the help of the developed countries and respecting the needs of developing countries, can both help the progress of sustainable development and equality of opportunities and enhance the effects of adaptive measures. This should lessen pressures on resources, improve management of environmental risks, and increase the welfare of the poorest members of society. It can also lead to reduced vulnerability to climate change. Inclusion of climatic risks in the design and implementation of national and international development initiatives can promote equity and development that is more sustainable and that reduces vulnerability to climate change. |
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1.3

Many states and regions that are vulnerable to climate change are also under pressure from forces such as population growth, resource depletion, and poverty. A policy, and measures based on it, formulated with the help of the developed countries and respecting the needs of developing countries, can both help the progress of sustainable development and equality of opportunities and enhance the effects of adaptive measures. This should lessen pressures on resources, improve management of environmental risks, and increase the welfare of the poorest members of society. It can also lead to reduced vulnerability to climate change. Inclusion of climatic risks in the design and implementation of national and international development initiatives can promote equity and development that is more sustainable and that reduces vulnerability to climate change.

| 1.4 | According to the Third Assessment Report (TAR), drawn up by the IPCC in 2001, the global average surface temperature has increased since 1861, and according to analyses of the World Meteorological Organisation, nine of the warmest years recorded have been in the last ten years. 1998 was the warmest year, followed by 2002, 2003, 2004 and 2001. The 20th century witnessed an increase in average temperature of 0.6 °C +/- 0.2 °C and forecasts indicate that, if appropriate measures are not taken, by the end of the 21th century temperatures will have risen by a further 1.4 °C to 5.8 °C. |
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1.4

According to the Third Assessment Report (TAR), drawn up by the IPCC in 2001, the global average surface temperature has increased since 1861, and according to analyses of the World Meteorological Organisation, nine of the warmest years recorded have been in the last ten years. 1998 was the warmest year, followed by 2002, 2003, 2004 and 2001. The 20th century witnessed an increase in average temperature of 0.6 °C +/- 0.2 °C and forecasts indicate that, if appropriate measures are not taken, by the end of the 21th century temperatures will have risen by a further 1.4 °C to 5.8 °C.

| 1.5 | The assumption which enjoys wide support in scientific circles — mostly in Europe — and is given great importance at the political level is that climate change is caused predominantly by the increase of greenhouse gases in the earth's atmosphere resulting from human activity, above all the burning of fossil fuels. This assumption is based on the correlation between a long-term growth in concentrations of greenhouse gases, especially carbon dioxide, in the atmosphere and the long-term trend in global temperatures in the twentieth century, as well as on results from climate models for assessing the extent and effects of climate changes in the future, taking account of projections of greenhouse gas emissions and their concentrations in the atmosphere. |
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1.5

The assumption which enjoys wide support in scientific circles — mostly in Europe — and is given great importance at the political level is that climate change is caused predominantly by the increase of greenhouse gases in the earth's atmosphere resulting from human activity, above all the burning of fossil fuels. This assumption is based on the correlation between a long-term growth in concentrations of greenhouse gases, especially carbon dioxide, in the atmosphere and the long-term trend in global temperatures in the twentieth century, as well as on results from climate models for assessing the extent and effects of climate changes in the future, taking account of projections of greenhouse gas emissions and their concentrations in the atmosphere.

| 1.6 | The influence of mankind on global climate change is already demonstrable despite doubts about the effects of aerosols and some natural factors (volcanic activity and solar irradiance). However, the global climate is also affected by cycles of solar activity and geophysical factors, and establishing exactly how great man's influence is compared with natural changes is not yet possible, nor is it likely to be for a long time. There are also uncertainties concerning the representativeness of available data and the results of the climate models, which still do not describe all the interactions with complete accuracy and therefore cannot simulate all the elements of the climate system with absolute precision. |
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1.6

The influence of mankind on global climate change is already demonstrable despite doubts about the effects of aerosols and some natural factors (volcanic activity and solar irradiance). However, the global climate is also affected by cycles of solar activity and geophysical factors, and establishing exactly how great man's influence is compared with natural changes is not yet possible, nor is it likely to be for a long time. There are also uncertainties concerning the representativeness of available data and the results of the climate models, which still do not describe all the interactions with complete accuracy and therefore cannot simulate all the elements of the climate system with absolute precision.

| 1.7 | The climate models used in making forecasts of atmospheric concentrations of greenhouse and aerosol gases and in the subsequent forecasts of future climate are based on scenarios in the IPCC Special Report on Emissions Scenarios. These scenarios bring together various hypotheses of the world's socio-economic, energy and population development to the end of the 21st century. |
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1.7

The climate models used in making forecasts of atmospheric concentrations of greenhouse and aerosol gases and in the subsequent forecasts of future climate are based on scenarios in the IPCC Special Report on Emissions Scenarios. These scenarios bring together various hypotheses of the world's socio-economic, energy and population development to the end of the 21st century.

| 1.8 | The vulnerability of human societies and natural systems to climate extremes is demonstrated by the damage, hardship, and death caused by events such as droughts, floods, heat waves, avalanches, and windstorms. Forecasts of future development suggest some extreme events are projected to increase in frequency during the 21st century and their impact is expected to be worse both in extent and severity. |
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1.8

The vulnerability of human societies and natural systems to climate extremes is demonstrated by the damage, hardship, and death caused by events such as droughts, floods, heat waves, avalanches, and windstorms. Forecasts of future development suggest some extreme events are projected to increase in frequency during the 21st century and their impact is expected to be worse both in extent and severity.

| 1.9 | Further research is required to improve the ability to detect, attribute and fully understand climate change, to reduce uncertainties and to project future climate changes. In particular, there is a need for additional systematic and sustained observations, modelling and process studies. |
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1.9

Further research is required to improve the ability to detect, attribute and fully understand climate change, to reduce uncertainties and to project future climate changes. In particular, there is a need for additional systematic and sustained observations, modelling and process studies.

| 1.10 | The man-made global warming hypothesis that climate change is a result of the increased content of greenhouse gases in the atmosphere was the basis for the policy decision of the states involved and the European Community to apply the principle of preventive action and to frame a policy and strategy for limiting climate change through reduction of greenhouse gas emissions, above all carbon dioxide, from the burning of fossil fuels. |
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1.10

The man-made global warming hypothesis that climate change is a result of the increased content of greenhouse gases in the atmosphere was the basis for the policy decision of the states involved and the European Community to apply the principle of preventive action and to frame a policy and strategy for limiting climate change through reduction of greenhouse gas emissions, above all carbon dioxide, from the burning of fossil fuels.

| 1.11 | The practical outcome of these policy decisions was the adoption of the Kyoto Protocol to the United Nations Framework Convention on Climate Change (December 1997) and its entry into force on 16 February 2005. |
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1.11

The practical outcome of these policy decisions was the adoption of the Kyoto Protocol to the United Nations Framework Convention on Climate Change (December 1997) and its entry into force on 16 February 2005.

| 1.12 | The Kyoto Protocol commits its signatories to reducing greenhouse gas emissions in the period 2008-2012 by the amounts they agreed to as set out in Appendix B to the Protocol in relation to the situation in 1990. The EU-15 Member States are obliged to reduce their total emissions by 8 % (i.e. by 336 Mt CO2eq annually). The new Member States have their own reduction targets set by Appendix B. In most cases this is also 8 %, though for Hungary and Poland it is 6 %. Appendix B stipulates a different reference year for Hungary, Poland and Slovenia. The Protocol also offers the chance of using flexible mechanisms (Emissions Trading, Joint Implementation projects in developed countries and Clean Development Mechanisms in developing countries) intended to help the developed countries meet their own Kyoto commitment under more favourable economic conditions and at the same time help developing countries to move over to new technologies. |
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1.12

The Kyoto Protocol commits its signatories to reducing greenhouse gas emissions in the period 2008-2012 by the amounts they agreed to as set out in Appendix B to the Protocol in relation to the situation in 1990. The EU-15 Member States are obliged to reduce their total emissions by 8 % (i.e. by 336 Mt CO2eq annually). The new Member States have their own reduction targets set by Appendix B. In most cases this is also 8 %, though for Hungary and Poland it is 6 %. Appendix B stipulates a different reference year for Hungary, Poland and Slovenia. The Protocol also offers the chance of using flexible mechanisms (Emissions Trading, Joint Implementation projects in developed countries and Clean Development Mechanisms in developing countries) intended to help the developed countries meet their own Kyoto commitment under more favourable economic conditions and at the same time help developing countries to move over to new technologies.

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| 1.13 | The EU-15 Member States account for roughly 85 % of the EU-25's total emissions and the new Member States 15 %. Current emissions inventories show that the EU-15, signatories to the Kyoto Protocol, had by 2003 only managed to reduce their total greenhouse gas emissions by 1.7 %, which significantly reduces the EU-15's real chances of achieving the Kyoto target by the 2008-2012 period. Although emissions in the EU-15 have risen by 3.6 % since 1995 and by as much as 4.3 % in the last five years, the latest emissions forecasts predict that additional emissions-reduction measures, combined with application of the Kyoto mechanisms, could produce cuts of 8.8 % by 2010, outstripping the EU-15 Kyoto target. In the period 1990-2003, the new EU Member States reduced total greenhouse gas emissions by 22 %, although much of this was achieved by the transformation processes in, above all, the first half of the 1990s: after 1995 emissions dropped by 6 % and have been stable in the last five years. |
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1.13

The EU-15 Member States account for roughly 85 % of the EU-25's total emissions and the new Member States 15 %. Current emissions inventories show that the EU-15, signatories to the Kyoto Protocol, had by 2003 only managed to reduce their total greenhouse gas emissions by 1.7 %, which significantly reduces the EU-15's real chances of achieving the Kyoto target by the 2008-2012 period. Although emissions in the EU-15 have risen by 3.6 % since 1995 and by as much as 4.3 % in the last five years, the latest emissions forecasts predict that additional emissions-reduction measures, combined with application of the Kyoto mechanisms, could produce cuts of 8.8 % by 2010, outstripping the EU-15 Kyoto target. In the period 1990-2003, the new EU Member States reduced total greenhouse gas emissions by 22 %, although much of this was achieved by the transformation processes in, above all, the first half of the 1990s: after 1995 emissions dropped by 6 % and have been stable in the last five years.

| 1.14 | Although the EU-15's prospect of meeting its Kyoto Protocol commitment suggests lowering emissions by 2012 could be a problem, a document drafted for the March 2005 Council sets out medium- and long-term reduction goals for economically developed states in the order of 15-30 % and 60-80 % of 1990 levels by 2020 and 2050 respectively. The IPCC estimates that this will slow growth in world GDP over the period 1990 to 2100 by between 0.003 % and 0.06 % per annum (1). The European Commission's estimates reckons with a drop in the EU 25's GDP of 0.5 % in 2025 if the target for CO2 concentration in the atmosphere is set at 550 ppmv and CO2 emissions are cut by 1.5 % annually after 2012. This assumes, however, that all countries will take part in combating climate change and in the emissions trading system. If the EU acts unilaterally, the impact on its GDP could be two to three times greater, without any discernible environmental benefits being achieved (2). |
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1.14

Although the EU-15's prospect of meeting its Kyoto Protocol commitment suggests lowering emissions by 2012 could be a problem, a document drafted for the March 2005 Council sets out medium- and long-term reduction goals for economically developed states in the order of 15-30 % and 60-80 % of 1990 levels by 2020 and 2050 respectively. The IPCC estimates that this will slow growth in world GDP over the period 1990 to 2100 by between 0.003 % and 0.06 % per annum (1). The European Commission's estimates reckons with a drop in the EU 25's GDP of 0.5 % in 2025 if the target for CO2 concentration in the atmosphere is set at 550 ppmv and CO2 emissions are cut by 1.5 % annually after 2012. This assumes, however, that all countries will take part in combating climate change and in the emissions trading system. If the EU acts unilaterally, the impact on its GDP could be two to three times greater, without any discernible environmental benefits being achieved (2).

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| 1.15 | The Kyoto Protocol's main problem is that its signatories do not include the USA, which produces the largest amounts of greenhouse gases in absolute terms (almost 25 % of the world total) and that so far there are no reduction targets for the commitment period 2008-2012 for those countries with the largest anticipated growth in these gases (India, China and others, where emissions have increased by more than 20 % since 1990). While in 1990, when international negotiations began, developing countries accounted for around 35 % of total world emissions, in 2000 the figure was around 40 % and forecasts indicate that by around 2010 it will be 50 % and in 2025 as high as 75 %. This represents a serious threat to the goals of this whole initiative. If a global consensus cannot be achieved on climate change issues through political negotiations, the isolated endeavours of European countries (the EU) will be incapable of producing the desired positive effects and could, on the contrary, create a serious imbalance in economic development. |
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1.15

The Kyoto Protocol's main problem is that its signatories do not include the USA, which produces the largest amounts of greenhouse gases in absolute terms (almost 25 % of the world total) and that so far there are no reduction targets for the commitment period 2008-2012 for those countries with the largest anticipated growth in these gases (India, China and others, where emissions have increased by more than 20 % since 1990). While in 1990, when international negotiations began, developing countries accounted for around 35 % of total world emissions, in 2000 the figure was around 40 % and forecasts indicate that by around 2010 it will be 50 % and in 2025 as high as 75 %. This represents a serious threat to the goals of this whole initiative. If a global consensus cannot be achieved on climate change issues through political negotiations, the isolated endeavours of European countries (the EU) will be incapable of producing the desired positive effects and could, on the contrary, create a serious imbalance in economic development.

| 1.16 | Whatever reservations there may be about the present state of knowledge on the causes of the climate changes taking place and the way that policy on climate change was initiated, framed and adopted, it has to be said that many activities geared towards reducing greenhouse gas emissions could have a significant beneficial effect, namely the reduction of energy consumption in the economic and private spheres. To achieve this, appropriate incentive mechanisms have to be found and investments made into developing science, research, new technologies and essential innovation. |
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1.16

Whatever reservations there may be about the present state of knowledge on the causes of the climate changes taking place and the way that policy on climate change was initiated, framed and adopted, it has to be said that many activities geared towards reducing greenhouse gas emissions could have a significant beneficial effect, namely the reduction of energy consumption in the economic and private spheres. To achieve this, appropriate incentive mechanisms have to be found and investments made into developing science, research, new technologies and essential innovation.

2.   Means to achieve EU objectives in the reduction of greenhouse gas emissions

| 2.1 | To meet its Kyoto Protocol commitments to reduce total emissions of greenhouse gases by the period 2008 to 2012 by 8 % and to reduce greenhouse gas emissions generally, the EU has adopted a strategic programme — European Climate Change Programme — and, as part of this, a series of specific regulatory measures of varying significance, of which the most important are: |
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2.1

To meet its Kyoto Protocol commitments to reduce total emissions of greenhouse gases by the period 2008 to 2012 by 8 % and to reduce greenhouse gas emissions generally, the EU has adopted a strategic programme — European Climate Change Programme — and, as part of this, a series of specific regulatory measures of varying significance, of which the most important are:

| 2.1.1 | Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading (3) (EU ETS) should be the key instrument for meeting obligations on reducing greenhouse gas emissions. This Directive was implemented in 2004, when National Allocation Plans were also put forward and, in most countries, approved, which allocated allowances for greenhouse gas emissions down to the level of individual sources and their operators. The Directive came into force on 1 January 2005 and should enable operators of undertakings producing greenhouse gases to trade in such a way as to optimise the costs to them of reducing these emissions. |
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2.1.1

Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading (3) (EU ETS) should be the key instrument for meeting obligations on reducing greenhouse gas emissions. This Directive was implemented in 2004, when National Allocation Plans were also put forward and, in most countries, approved, which allocated allowances for greenhouse gas emissions down to the level of individual sources and their operators. The Directive came into force on 1 January 2005 and should enable operators of undertakings producing greenhouse gases to trade in such a way as to optimise the costs to them of reducing these emissions.

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| 2.1.2 | The Linking Directive establishing a scheme for greenhouse gas emission allowance trading within the Community in respect of the Kyoto Protocol's project mechanisms is intended to link the Kyoto Protocol's flexible mechanisms — JI and CDM — to the EU emissions trading scheme. This way Member States and businesses will be able to meet their own targets in collaboration with other countries which have ratified the Kyoto Protocol. |
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2.1.2

The Linking Directive establishing a scheme for greenhouse gas emission allowance trading within the Community in respect of the Kyoto Protocol's project mechanisms is intended to link the Kyoto Protocol's flexible mechanisms — JI and CDM — to the EU emissions trading scheme. This way Member States and businesses will be able to meet their own targets in collaboration with other countries which have ratified the Kyoto Protocol.

| 2.1.3 | Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources (4) is a very important instrument for the introduction and use of renewable energy sources (water, wind, solar, biomass, geothermal energy) and intended to offset the costs of the initial phase of making practical use of renewable energy sources. |
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2.1.3

Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources (4) is a very important instrument for the introduction and use of renewable energy sources (water, wind, solar, biomass, geothermal energy) and intended to offset the costs of the initial phase of making practical use of renewable energy sources.

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| 2.1.4 | Directive 2003/30/EC on the promotion of the use of biofuels (5), including their use for motor vehicles, creates favourable conditions for limiting the consumption of liquid fossil fuels in favour of fuels from renewable sources. |
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2.1.4

Directive 2003/30/EC on the promotion of the use of biofuels (5), including their use for motor vehicles, creates favourable conditions for limiting the consumption of liquid fossil fuels in favour of fuels from renewable sources.

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| 2.1.5 | Directive 2004/8/EC on the promotion of cogeneration of heat and electricity (6) aimed at facilitating greater use for energy of fossil fuels in cogeneration. |
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2.1.5

Directive 2004/8/EC on the promotion of cogeneration of heat and electricity (6) aimed at facilitating greater use for energy of fossil fuels in cogeneration.

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| 2.1.6 | Directive 2003/96/EC on the taxation of energy products and electricity (7) introducing a ‘carbon tax’ throughout the EU and creating the framework for ecological tax reform and the internalisation of externalities. |
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2.1.6

Directive 2003/96/EC on the taxation of energy products and electricity (7) introducing a ‘carbon tax’ throughout the EU and creating the framework for ecological tax reform and the internalisation of externalities.

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| 2.1.7 | Proposal for a Regulation of the European Parliament and of the Council on certain fluorinated greenhouse gases (HFCs, PFCs and SF6) (8), expected to be adopted during the course of the current year. |
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2.1.7

Proposal for a Regulation of the European Parliament and of the Council on certain fluorinated greenhouse gases (HFCs, PFCs and SF6) (8), expected to be adopted during the course of the current year.

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| 2.1.8 | Measures introducing the assessment of heat insulation properties of buildings and their improvement and some further regulatory technical instruments. |
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2.1.8

Measures introducing the assessment of heat insulation properties of buildings and their improvement and some further regulatory technical instruments.

| 2.2 | While the regulatory framework created by directives on renewable energy sources, cogeneration, taxation of energy products and support of biofuels modify market conditions to make reduction of fossil fuels use easier and more effective, and in essence also to create equal conditions for operators in the same branches of industry, the implementation of the Directive on greenhouse gas emission allowance trading provokes a series of mixed reactions, particularly regarding the drawing-up of national allocation plans for the different sources and the process for approving these plans. The scheme's shortcoming is that it fails to create a level playing field for those taking part in the trading system, both at national level between individual manufacturing sectors and at international level between Member States. |
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2.2

While the regulatory framework created by directives on renewable energy sources, cogeneration, taxation of energy products and support of biofuels modify market conditions to make reduction of fossil fuels use easier and more effective, and in essence also to create equal conditions for operators in the same branches of industry, the implementation of the Directive on greenhouse gas emission allowance trading provokes a series of mixed reactions, particularly regarding the drawing-up of national allocation plans for the different sources and the process for approving these plans. The scheme's shortcoming is that it fails to create a level playing field for those taking part in the trading system, both at national level between individual manufacturing sectors and at international level between Member States.

| 2.3 | The impact on the market of the implementation of the Directive Regulation supporting electricity production from renewable sources is far more evident. It sets out in advance clear rules on the conditions under which energy for distribution networks will be purchased at the national level. It can be assumed that these conditions will naturally differ from country to country, which can also be taken as an infringement of a level playing field for economic competition; nevertheless, it is up to each Member State to decide what its priorities are and to know what its possibilities are and on the basis of this to set favourable prices for electricity from the various sources of renewable energy. |
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2.3

The impact on the market of the implementation of the Directive Regulation supporting electricity production from renewable sources is far more evident. It sets out in advance clear rules on the conditions under which energy for distribution networks will be purchased at the national level. It can be assumed that these conditions will naturally differ from country to country, which can also be taken as an infringement of a level playing field for economic competition; nevertheless, it is up to each Member State to decide what its priorities are and to know what its possibilities are and on the basis of this to set favourable prices for electricity from the various sources of renewable energy.

| 2.4 | Somewhat lagging behind the regulatory measures are support measures, notably for science and research in the Sixth Framework Programme (9), in which funding of EUR 2,120 million is allocated for climate change science and research for the period 2003 to 2006. These are earmarked for ‘sustainable energy systems’, ‘sustainable surface transport’ and ‘global change and ecosystems’. The Seventh Framework Programme (10) for the period 2007-2013 allocates a total of EUR 2 931 million for its Energy heading, with priorities including hydrogen and fuel cells, renewable electricity generation and liquid biofuels for transport, as well as clean coal technologies and sequestration, energy savings and efficient energy use; research into climate change and reducing vulnerability and risks are included in the Environment and Climate Change heading, for which a further EUR 2 535 million is budgeted. |
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2.4

Somewhat lagging behind the regulatory measures are support measures, notably for science and research in the Sixth Framework Programme (9), in which funding of EUR 2,120 million is allocated for climate change science and research for the period 2003 to 2006. These are earmarked for ‘sustainable energy systems’, ‘sustainable surface transport’ and ‘global change and ecosystems’. The Seventh Framework Programme (10) for the period 2007-2013 allocates a total of EUR 2 931 million for its Energy heading, with priorities including hydrogen and fuel cells, renewable electricity generation and liquid biofuels for transport, as well as clean coal technologies and sequestration, energy savings and efficient energy use; research into climate change and reducing vulnerability and risks are included in the Environment and Climate Change heading, for which a further EUR 2 535 million is budgeted.

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| 2.5 | Key areas in which more substantial savings in greenhouse gas emissions can be made include expanding the use of biomass, better care of plantations and their renewal and extending forestation in uncultivated agricultural land in suitable locations. Promoting geological sequestration and the safe use of nuclear energy would also produce emissions savings. |
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2.5

Key areas in which more substantial savings in greenhouse gas emissions can be made include expanding the use of biomass, better care of plantations and their renewal and extending forestation in uncultivated agricultural land in suitable locations. Promoting geological sequestration and the safe use of nuclear energy would also produce emissions savings.

| 2.6 | Whereas some countries have decided to give up nuclear energy or have renounced it from the start, in other countries nuclear energy plays a major role in energy production. Work is being conducted on nuclear fusion, but it is estimated that it will be at least fifty years before it becomes economically viable to use. This being the case, encouraging safer nuclear fission, recycling spent nuclear fuel and solving the problems of final storage, continue to be a challenge. Many countries consider promoting and retaining nuclear energy a suitable tool to curb greenhouse gas emissions. Other countries express their reservations towards such an approach because of risks being connected with nuclear energy. |
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2.6

Whereas some countries have decided to give up nuclear energy or have renounced it from the start, in other countries nuclear energy plays a major role in energy production. Work is being conducted on nuclear fusion, but it is estimated that it will be at least fifty years before it becomes economically viable to use. This being the case, encouraging safer nuclear fission, recycling spent nuclear fuel and solving the problems of final storage, continue to be a challenge. Many countries consider promoting and retaining nuclear energy a suitable tool to curb greenhouse gas emissions. Other countries express their reservations towards such an approach because of risks being connected with nuclear energy.

| 2.7 | Relatively little attention is paid to the very important issue of making Europe as a whole, and specifically the individual Member States, less vulnerable should climate changes occur. This very important sphere merits much greater attention and funds invested here yield the greatest benefit. |
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2.7

Relatively little attention is paid to the very important issue of making Europe as a whole, and specifically the individual Member States, less vulnerable should climate changes occur. This very important sphere merits much greater attention and funds invested here yield the greatest benefit.

3.   The consequences for industrial change of implementing the Kyoto Protocol and policies to limit climate change

| 3.1 | The consequences of implementing the Kyoto Protocol and attendant policies and measures fall into two categories: 1) those leading to structural changes in branches of industry (including possible relocation of some manufacturers or even sectors) and 2) those primarily improving efficiency in energy use and provoking internal changes in the individual branches, especially those with high energy needs. In order to achieve success without unnecessary losses, means need to be chosen that provide a balance of regulation and positive stimulus to the market. Otherwise, it would be unrealistic to expect climate change policies to be at all successful. |
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3.1

The consequences of implementing the Kyoto Protocol and attendant policies and measures fall into two categories: 1) those leading to structural changes in branches of industry (including possible relocation of some manufacturers or even sectors) and 2) those primarily improving efficiency in energy use and provoking internal changes in the individual branches, especially those with high energy needs. In order to achieve success without unnecessary losses, means need to be chosen that provide a balance of regulation and positive stimulus to the market. Otherwise, it would be unrealistic to expect climate change policies to be at all successful.

| 3.2 | Instruments which raise the costs of primary (fossil) energy sources and electricity could lead to structural changes. The reasons for price rises are a) the as yet only partially liberalised energy market and the consequent risk of monopolistic behaviour by large energy companies which can afford to pass on the increased costs of climate change measures (permits, purchase price of renewable energy) in the market price, and b) taxation (an external factor). It must be said that in the EU's partially liberalised energy market, those markets which are fully liberalised have a tendency to raise energy prices on the pretext of fighting climate change, as when passing on the price of coal in full. Significant rises in electricity prices and deformation in the structure of industry can be expected as a result of the following measures: |
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3.2

Instruments which raise the costs of primary (fossil) energy sources and electricity could lead to structural changes. The reasons for price rises are a) the as yet only partially liberalised energy market and the consequent risk of monopolistic behaviour by large energy companies which can afford to pass on the increased costs of climate change measures (permits, purchase price of renewable energy) in the market price, and b) taxation (an external factor). It must be said that in the EU's partially liberalised energy market, those markets which are fully liberalised have a tendency to raise energy prices on the pretext of fighting climate change, as when passing on the price of coal in full. Significant rises in electricity prices and deformation in the structure of industry can be expected as a result of the following measures:

| 3.2.1 | The promotion of electricity production from renewable sources has a whole series of consequences and benefits and these influences differ according to the kind of renewable energy involved. The least problematic, relatively speaking, is the use of hydro energy (where well-considered and economical modification of water flows is needed and large dams can be problematic). The range of problems increases with the use and management of wind energy. The burning of biomass has to overcome a whole series of obstacles and red-tape before the advantages outweigh the costs of using what is a very diverse renewable source. Foremost among these is the danger of large power station concerns buying up biomass as an additive for thermal power stations, thus forcing up the price and making it too costly for local heating plants or for the processing industry concerned. The truly clean sources (solar panels and geothermal energy) are still at a stage of development where their use on any significant scale is out of the question. One consequence, in any event, is a higher purchase price of energy from renewable sources which is set arbitrarily and passed on to the consumer. Generally speaking, however, the use of renewable energy sources should be supported and the best ways sought to make them economically viable. |
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3.2.1

The promotion of electricity production from renewable sources has a whole series of consequences and benefits and these influences differ according to the kind of renewable energy involved. The least problematic, relatively speaking, is the use of hydro energy (where well-considered and economical modification of water flows is needed and large dams can be problematic). The range of problems increases with the use and management of wind energy. The burning of biomass has to overcome a whole series of obstacles and red-tape before the advantages outweigh the costs of using what is a very diverse renewable source. Foremost among these is the danger of large power station concerns buying up biomass as an additive for thermal power stations, thus forcing up the price and making it too costly for local heating plants or for the processing industry concerned. The truly clean sources (solar panels and geothermal energy) are still at a stage of development where their use on any significant scale is out of the question. One consequence, in any event, is a higher purchase price of energy from renewable sources which is set arbitrarily and passed on to the consumer. Generally speaking, however, the use of renewable energy sources should be supported and the best ways sought to make them economically viable.

| 3.2.2 | In view of the fact that not all countries have set taxation of primary energy sources at the same level and the Member States have very different internal conditions, this measure will bring about industrial change by causing an imbalance which might influence the allocation of investment into developing capacities and new technologies in branches of industry heavily dependent on energy. This instrument should be used as the last resort and with the utmost caution, especially because the taxing of primary energies in Europe puts those countries where taxation has been introduced at a competitive disadvantage. |
| --- | --- |

3.2.2

In view of the fact that not all countries have set taxation of primary energy sources at the same level and the Member States have very different internal conditions, this measure will bring about industrial change by causing an imbalance which might influence the allocation of investment into developing capacities and new technologies in branches of industry heavily dependent on energy. This instrument should be used as the last resort and with the utmost caution, especially because the taxing of primary energies in Europe puts those countries where taxation has been introduced at a competitive disadvantage.

| 3.2.3 | The introduction of the European system of emission allowances trading (EU ETS) involves a rise in energy prices (the range is between 8 % and 40 %, depending on source and area) and a loss of competitiveness manifesting itself in a drop in GDP of between 0.35 % and 0.82 %. Also expected are a drop in the European economy's export performance and tougher competition with countries which, unencumbered by measures to reduce climate change, have low energy costs. The way the system is being introduced is very chaotic and is causing uncertainty in the investment environment as a whole, while favouring only those with inefficient processes and management systems. |
| --- | --- |

3.2.3

The introduction of the European system of emission allowances trading (EU ETS) involves a rise in energy prices (the range is between 8 % and 40 %, depending on source and area) and a loss of competitiveness manifesting itself in a drop in GDP of between 0.35 % and 0.82 %. Also expected are a drop in the European economy's export performance and tougher competition with countries which, unencumbered by measures to reduce climate change, have low energy costs. The way the system is being introduced is very chaotic and is causing uncertainty in the investment environment as a whole, while favouring only those with inefficient processes and management systems.

| 3.2.4 | The structural effects on some branches of industry (production of ferrous and non-ferrous metals, building materials, the chemical and paper industries, etc.) are increased by the impact of EU ETS introduction, as well as by the trend in energy pricing. In recent times — at the beginning of the 1990s — these branches invested heavily in modernisation and reducing energy consumption, and some of them also managed to boost production substantially. In reality, EU ETS means that the system of allowances is such that modernised companies will have to buy allowances, while those who have invested no effort or resources will receive a ‘contribution’ to their development in the form of allowances which they can sell. The core trading period of 2008-2012 could already land these companies with insuperable economic difficulties because in many cases they have already achieved the minimum levels of emissions technically and technologically possible and the maximum energy efficiency, making further reduction simply impossible. |
| --- | --- |

3.2.4

The structural effects on some branches of industry (production of ferrous and non-ferrous metals, building materials, the chemical and paper industries, etc.) are increased by the impact of EU ETS introduction, as well as by the trend in energy pricing. In recent times — at the beginning of the 1990s — these branches invested heavily in modernisation and reducing energy consumption, and some of them also managed to boost production substantially. In reality, EU ETS means that the system of allowances is such that modernised companies will have to buy allowances, while those who have invested no effort or resources will receive a ‘contribution’ to their development in the form of allowances which they can sell. The core trading period of 2008-2012 could already land these companies with insuperable economic difficulties because in many cases they have already achieved the minimum levels of emissions technically and technologically possible and the maximum energy efficiency, making further reduction simply impossible.

| 3.2.5 | In some branches of industry (the steel industry, most notably) greenhouse gasses are released as a result of physical-chemical processes. In most cases, such emissions have already been reduced to the lowest levels technically possible. These physical-chemical emissions, which cannot be reduced further, should be exempted from trading. This does not mean, however, that the branches of industries in question are relieved of the obligation to reduce current emissions in other spheres (energy production). The ceiling of allowances for individual states and individual operators of emissions sources is another crucial factor. Given that the system is only just coming into operation, as yet there is no significant practical experience of how it works and its practical effects to draw on. Expectations of its effects run the gamut from outright scepticism to exaggerated optimism. The truth is that even those who invented the system have not published any concrete figures for greenhouse gas emissions reduction following the introduction of EU ETS to show the benefits of the envisaged measures to reduce greenhouse gas emissions. Nevertheless, the economic sector prefers a well functioning and non-discriminatory system of emissions trading to taxation of energy. |
| --- | --- |

3.2.5

In some branches of industry (the steel industry, most notably) greenhouse gasses are released as a result of physical-chemical processes. In most cases, such emissions have already been reduced to the lowest levels technically possible. These physical-chemical emissions, which cannot be reduced further, should be exempted from trading. This does not mean, however, that the branches of industries in question are relieved of the obligation to reduce current emissions in other spheres (energy production). The ceiling of allowances for individual states and individual operators of emissions sources is another crucial factor. Given that the system is only just coming into operation, as yet there is no significant practical experience of how it works and its practical effects to draw on. Expectations of its effects run the gamut from outright scepticism to exaggerated optimism. The truth is that even those who invented the system have not published any concrete figures for greenhouse gas emissions reduction following the introduction of EU ETS to show the benefits of the envisaged measures to reduce greenhouse gas emissions. Nevertheless, the economic sector prefers a well functioning and non-discriminatory system of emissions trading to taxation of energy.

| 3.3 | Far more important are the changes resulting from other instruments. Although these attract less media attention than EU ETS, they will in the course of time bring real reductions in energy consumption as a whole or in the consumption of fossil fuels in energy production. This is, then, a very desirable course of development with a specific potential to reduce greenhouse gases, though even here there are some risks which cannot be overlooked. |
| --- | --- |

3.3

Far more important are the changes resulting from other instruments. Although these attract less media attention than EU ETS, they will in the course of time bring real reductions in energy consumption as a whole or in the consumption of fossil fuels in energy production. This is, then, a very desirable course of development with a specific potential to reduce greenhouse gases, though even here there are some risks which cannot be overlooked.

| 3.3.1 | If the Directive on the promotion of electricity produced from renewable energy sources is fully implemented to the extent intended, the estimated reduction of greenhouse gas emissions in the EU-15 will be between 100 and 125 Mt CO2eq, making it the single largest contribution to the reduction of greenhouse gas emissions. As well as the direct effect of reducing emissions, there should also be benefits in the development of technology and equipment both for physical processes of energy production (water, wind, solar) and thermal processes using biomass for energy. The potential risk in the case of using biomass is the loss of some renewable raw materials (especially wood) for the processing branches. The support given needs, therefore, to be carefully chosen to avoid such loss. With wind energy, the risk lies in its instability and having a large share of energy coming from wind power could jeopardise the reliable supply of electricity in the networks; capacity therefore needs to be backed up by stable sources. |
| --- | --- |

3.3.1

If the Directive on the promotion of electricity produced from renewable energy sources is fully implemented to the extent intended, the estimated reduction of greenhouse gas emissions in the EU-15 will be between 100 and 125 Mt CO2eq, making it the single largest contribution to the reduction of greenhouse gas emissions. As well as the direct effect of reducing emissions, there should also be benefits in the development of technology and equipment both for physical processes of energy production (water, wind, solar) and thermal processes using biomass for energy. The potential risk in the case of using biomass is the loss of some renewable raw materials (especially wood) for the processing branches. The support given needs, therefore, to be carefully chosen to avoid such loss. With wind energy, the risk lies in its instability and having a large share of energy coming from wind power could jeopardise the reliable supply of electricity in the networks; capacity therefore needs to be backed up by stable sources.

2eq

| 3.3.2 | When fully implemented, the Directive on the promotion of the use of biofuels should reduce greenhouse gas emissions in the EU-15 by 35 to 40 Mt CO2; it should also have the secondary effect of giving a new opportunity to agriculture and the processing industry — supplying raw materials and biofuels for motor vehicles. |
| --- | --- |

3.3.2

When fully implemented, the Directive on the promotion of the use of biofuels should reduce greenhouse gas emissions in the EU-15 by 35 to 40 Mt CO2; it should also have the secondary effect of giving a new opportunity to agriculture and the processing industry — supplying raw materials and biofuels for motor vehicles.

2

| 3.3.3 | The Directive on the promotion of cogeneration of heat and electricity is an important element of the system to reduce greenhouse gas emissions and could reduce them in the EU-15 by 65 Mt CO2 per annum; it also aims to make heat generation more energy efficient where the system has not as yet been employed (especially large energy sources for heating households, etc.). Many industrial plants have already been using the system for a considerable time. Most often, the risk is the relatively high cost of fuels compared to the increased energy gained and the resulting low return on investment, the large investment needed if introducing the system requires conversion of essential plant and the fact that these sources are not usually operated non-stop, which makes their access to the network more difficult. In the energy supply sector, the total possible savings on greenhouse gas emissions are estimated at between 250 and 285 Mt CO2eq. |
| --- | --- |

3.3.3

The Directive on the promotion of cogeneration of heat and electricity is an important element of the system to reduce greenhouse gas emissions and could reduce them in the EU-15 by 65 Mt CO2 per annum; it also aims to make heat generation more energy efficient where the system has not as yet been employed (especially large energy sources for heating households, etc.). Many industrial plants have already been using the system for a considerable time. Most often, the risk is the relatively high cost of fuels compared to the increased energy gained and the resulting low return on investment, the large investment needed if introducing the system requires conversion of essential plant and the fact that these sources are not usually operated non-stop, which makes their access to the network more difficult. In the energy supply sector, the total possible savings on greenhouse gas emissions are estimated at between 250 and 285 Mt CO2eq.

2

2eq

| 3.3.4 | Fiscal measures should only be used very carefully and to provide the incentive of lower taxation for players which reduce greenhouse gas emissions. There is also the question of taxing airline fuel. At present, air travel has a tax advantage over other forms of transport, though, admittedly, it accounts for only about 2 % of greenhouse gas emissions. Any taxing of airline fuels must be done globally, the steps need to be proposed and implemented with due regard to the highly competitive environment in air travel and they must not come unilaterally from the EU. |
| --- | --- |

3.3.4

Fiscal measures should only be used very carefully and to provide the incentive of lower taxation for players which reduce greenhouse gas emissions. There is also the question of taxing airline fuel. At present, air travel has a tax advantage over other forms of transport, though, admittedly, it accounts for only about 2 % of greenhouse gas emissions. Any taxing of airline fuels must be done globally, the steps need to be proposed and implemented with due regard to the highly competitive environment in air travel and they must not come unilaterally from the EU.

| 3.3.5 | Possible savings in energy consumption are estimated at 215 to 260 Mt CO2eq, of which total savings of 35 to 45 Mt CO2eq could come from better insulation of buildings. Potential savings in transport are put at between 150 and 180 Mt CO2eq. |
| --- | --- |

3.3.5

Possible savings in energy consumption are estimated at 215 to 260 Mt CO2eq, of which total savings of 35 to 45 Mt CO2eq could come from better insulation of buildings. Potential savings in transport are put at between 150 and 180 Mt CO2eq.

2eq

2eq

2eq

| 3.3.6 | Policy measures also include the Regulation on certain fluorinated greenhouse gases (HFCs, PFCs and SF6), which account for a relatively small share of greenhouse gases. At present the figure is around 2 % of the EU's total greenhouse gas emissions and can be expected to rise to 3 % after 2012. The chances of reducing this lie mostly in limiting the use of these materials in commercial refrigeration equipment, in the production of HFC-23 and in fixed or mobile air-conditioning units. According to the latest IPCC estimates, costs could be in the order of 10 to 300 US$/tCO2eq (sectoral and regional difference). Potential emissions savings are put at 18 to 21 Mt CO2eq. |
| --- | --- |

3.3.6

Policy measures also include the Regulation on certain fluorinated greenhouse gases (HFCs, PFCs and SF6), which account for a relatively small share of greenhouse gases. At present the figure is around 2 % of the EU's total greenhouse gas emissions and can be expected to rise to 3 % after 2012. The chances of reducing this lie mostly in limiting the use of these materials in commercial refrigeration equipment, in the production of HFC-23 and in fixed or mobile air-conditioning units. According to the latest IPCC estimates, costs could be in the order of 10 to 300 US$/tCO2eq (sectoral and regional difference). Potential emissions savings are put at 18 to 21 Mt CO2eq.

6

2eq

2eq

| 3.3.7 | Sequestration in plant material has great potential for reducing greenhouse gases — by between 60 and 100 Mt CO2eq if the right conditions are created. |
| --- | --- |

3.3.7

Sequestration in plant material has great potential for reducing greenhouse gases — by between 60 and 100 Mt CO2eq if the right conditions are created.

2eq

| 3.4 | CO2 capture and storage in suitable geological strata or underground spaces comprises the separation of CO2 from suitable anthropogenic sources, the transportation to a storage location, and the isolation from the atmosphere for a long period of time. The reduction of emissions in this way (CCS — carbon capture and separation) is influenced by the amount of CO2 captured, the reduction in overall efficiency of power plants or industrial processes due to the additional energy required for capture, transport and storage, and the fraction of CO2 retained in storage. Current technology can capture about 90 % of the CO2 fed into a capture plant. However, roughly 15-30 % more energy is needed to operate the CCS system (most of it for capture) leading to a net emission reduction of approximately 85 %. |
| --- | --- |

3.4

CO2 capture and storage in suitable geological strata or underground spaces comprises the separation of CO2 from suitable anthropogenic sources, the transportation to a storage location, and the isolation from the atmosphere for a long period of time. The reduction of emissions in this way (CCS — carbon capture and separation) is influenced by the amount of CO2 captured, the reduction in overall efficiency of power plants or industrial processes due to the additional energy required for capture, transport and storage, and the fraction of CO2 retained in storage. Current technology can capture about 90 % of the CO2 fed into a capture plant. However, roughly 15-30 % more energy is needed to operate the CCS system (most of it for capture) leading to a net emission reduction of approximately 85 %.

2

2

2

2

2

4.   Conclusions and recommendations

Conclusions and recommendations

| 4.1 | Climate change is a unique problem that humanity has never before encountered in modern times. The problem is global, long-term (even a few centuries) and involves complex interactions between climatic, environmental, economic, political, institutional, social and technological processes. This has important international and intergenerational consequences in the context of broader societal goals such as equality and sustainable development. Developing a response to climate change is characterised by decision-making which involves substantial uncertainties and risks, including the possibility of non-linear and/or irreversible changes. |
| --- | --- |

4.1

Climate change is a unique problem that humanity has never before encountered in modern times. The problem is global, long-term (even a few centuries) and involves complex interactions between climatic, environmental, economic, political, institutional, social and technological processes. This has important international and intergenerational consequences in the context of broader societal goals such as equality and sustainable development. Developing a response to climate change is characterised by decision-making which involves substantial uncertainties and risks, including the possibility of non-linear and/or irreversible changes.

| 4.2 | Adverse manifestations of global climate change include increasingly extreme weather conditions (e.g. downpours, floods, landslides, drought and windstorms), which are causing ever greater damage to people and property. Estimates of cost and benefits of mitigation actions differ in how welfare is measured, the scope and methodology of the analysis, and the underlying assumptions built into the analyses. As a result, estimated costs and benefits may not reflect the actual costs and benefits of implementing mitigation actions. |
| --- | --- |

4.2

Adverse manifestations of global climate change include increasingly extreme weather conditions (e.g. downpours, floods, landslides, drought and windstorms), which are causing ever greater damage to people and property. Estimates of cost and benefits of mitigation actions differ in how welfare is measured, the scope and methodology of the analysis, and the underlying assumptions built into the analyses. As a result, estimated costs and benefits may not reflect the actual costs and benefits of implementing mitigation actions.

| 4.3 | Further policies to reduce greenhouse gas emissions must take into account all the economic parameters. If not, those states which have ratified the Kyoto protocol run the risk of having some of their manufacturing move to developed economies which are still hesitating to sign the protocol or to developing countries which are not yet subject to any quota obligations under it. This could result in economic losses and weakened competitiveness, without producing the desired global reduction in emissions. |
| --- | --- |

4.3

Further policies to reduce greenhouse gas emissions must take into account all the economic parameters. If not, those states which have ratified the Kyoto protocol run the risk of having some of their manufacturing move to developed economies which are still hesitating to sign the protocol or to developing countries which are not yet subject to any quota obligations under it. This could result in economic losses and weakened competitiveness, without producing the desired global reduction in emissions.

| 4.4 | The successful implementation of climate change mitigation options needs to overcome many technical, economic, political, cultural, social, behavioural and/or institutional barriers which prevent the full exploitation of the technological, economic and social opportunities of these mitigation options. The potential mitigation opportunities and types of barriers vary by region and sector, and over time. |
| --- | --- |

4.4

The successful implementation of climate change mitigation options needs to overcome many technical, economic, political, cultural, social, behavioural and/or institutional barriers which prevent the full exploitation of the technological, economic and social opportunities of these mitigation options. The potential mitigation opportunities and types of barriers vary by region and sector, and over time.

| 4.5 | The effectiveness of climate change mitigation can be enhanced when climate policies are integrated with the non-climate objectives of national and sectoral policy development and be turned into broad transition strategies to achieve the long-term social and technological changes required by both sustainable development and climate change mitigation. |
| --- | --- |

4.5

The effectiveness of climate change mitigation can be enhanced when climate policies are integrated with the non-climate objectives of national and sectoral policy development and be turned into broad transition strategies to achieve the long-term social and technological changes required by both sustainable development and climate change mitigation.

| 4.6 | Coordinated actions among countries and sectors may help to reduce mitigation cost, address competitiveness concerns, potential conflicts with international trade rules, and carbon leakage. A group of countries that wants to limit its collective greenhouse gas emissions should agree to implement well-designed and effective international instruments. |
| --- | --- |

4.6

Coordinated actions among countries and sectors may help to reduce mitigation cost, address competitiveness concerns, potential conflicts with international trade rules, and carbon leakage. A group of countries that wants to limit its collective greenhouse gas emissions should agree to implement well-designed and effective international instruments.

| 4.7 | Climate change is a global phenomenon and should be tackled as such. All possible political instruments or negotiations should be used to involve all the world's major producers of greenhouse gases in efforts to reduce the global level of greenhouse gas concentrations in the atmosphere. The ‘choice’ of major polluters should take account of the estimated level of total greenhouse gas emissions in the atmosphere after 2012. True progress cannot be achieved without using adequate political and economic means. |
| --- | --- |

4.7

Climate change is a global phenomenon and should be tackled as such. All possible political instruments or negotiations should be used to involve all the world's major producers of greenhouse gases in efforts to reduce the global level of greenhouse gas concentrations in the atmosphere. The ‘choice’ of major polluters should take account of the estimated level of total greenhouse gas emissions in the atmosphere after 2012. True progress cannot be achieved without using adequate political and economic means.

| 4.8 | There also needs to be a realistic assessment of the will of the Member States of the EU itself to achieve far more ambitious goals of obligatory emissions reductions after 2012 with a view to the Lisbon Strategy and the results so far of measures adopted and implemented. In this regard, we welcome the proposals in the Commission's Communication Winning the battle against Climate Change and accompanying documents. |
| --- | --- |

4.8

There also needs to be a realistic assessment of the will of the Member States of the EU itself to achieve far more ambitious goals of obligatory emissions reductions after 2012 with a view to the Lisbon Strategy and the results so far of measures adopted and implemented. In this regard, we welcome the proposals in the Commission's Communication Winning the battle against Climate Change and accompanying documents.

Winning the battle against Climate Change

| 4.9 | The EU's approach in the immediate future should be to prepare concrete arguments to present at international negotiations on climate change. These negotiations must lead in the future to an acceptable way of continuing the process of reducing greenhouse gas emissions after 2012 — one that involves all the economically developed countries and the prime producers of emissions in the developing countries as a whole and especially those where development is rapid. Failing this, it will have to be accepted that in 2012 the Kyoto Protocol in its present form will only cover a quarter of the world's total greenhouse gas emissions. As it stands now, the Protocol cannot be an effective instrument for addressing the question of global climate in the future and an approach will have to be sought which can seamlessly follow on from it. This must, however, include a rethink of instruments for reducing greenhouse gases, including the EU ETS, both in terms of their real impact on the global volume of greenhouse gas emissions and their cost effectiveness and administrative burden. Steps should be taken immediately to compare the proposals and plans of various groups of countries for long-term reductions in greenhouse gases so that the right decisions can be taken in time. |
| --- | --- |

4.9

The EU's approach in the immediate future should be to prepare concrete arguments to present at international negotiations on climate change. These negotiations must lead in the future to an acceptable way of continuing the process of reducing greenhouse gas emissions after 2012 — one that involves all the economically developed countries and the prime producers of emissions in the developing countries as a whole and especially those where development is rapid. Failing this, it will have to be accepted that in 2012 the Kyoto Protocol in its present form will only cover a quarter of the world's total greenhouse gas emissions. As it stands now, the Protocol cannot be an effective instrument for addressing the question of global climate in the future and an approach will have to be sought which can seamlessly follow on from it. This must, however, include a rethink of instruments for reducing greenhouse gases, including the EU ETS, both in terms of their real impact on the global volume of greenhouse gas emissions and their cost effectiveness and administrative burden. Steps should be taken immediately to compare the proposals and plans of various groups of countries for long-term reductions in greenhouse gases so that the right decisions can be taken in time.

| 4.10 | The global community must be involved in solving global problems by political means. It has to be openly admitted, however, that such involvement is not necessarily in the interest of all the big polluters and that, because of their size and geographical location (USA, China), they prefer a unilateral approach. If there is political failure, the EU's continued leading role in climate change issues could weaken the ability to adapt without having any tangible effect on climate change itself. |
| --- | --- |

4.10

The global community must be involved in solving global problems by political means. It has to be openly admitted, however, that such involvement is not necessarily in the interest of all the big polluters and that, because of their size and geographical location (USA, China), they prefer a unilateral approach. If there is political failure, the EU's continued leading role in climate change issues could weaken the ability to adapt without having any tangible effect on climate change itself.

| 4.11 | These problems cannot be solved without a far better understanding of both the causes of the phenomenon and the possibilities of reducing the man-made influences involved. Only adequate investment in science and research, monitoring and systematic observation will enable the necessary acceleration in scientific understanding of the real causes of climate change. |
| --- | --- |

4.11

These problems cannot be solved without a far better understanding of both the causes of the phenomenon and the possibilities of reducing the man-made influences involved. Only adequate investment in science and research, monitoring and systematic observation will enable the necessary acceleration in scientific understanding of the real causes of climate change.

| 4.12 | There can be no doubt that in many respects the key factor of both economic success and the progressive reduction of greenhouse gas emissions is efficient manufacturing and above all an economical use of energy. The instruments we see as being appropriate and effective for this within the energy production sector are increased use of renewable sources, selected according to the specific conditions of the individual Member States, including the use of biomass in transport, the rational use of the potential of co-generation, increasing the global efficiency of electricity and heat production, while being aware that there are limits to the effectiveness of these measures. Another relatively straightforward contribution to reducing greenhouse gasses is using solar energy for heating water (for domestic consumption or heating) and the use of heat pumps which are now becoming economically viable for use on a small scale, such as in individual houses. |
| --- | --- |

4.12

There can be no doubt that in many respects the key factor of both economic success and the progressive reduction of greenhouse gas emissions is efficient manufacturing and above all an economical use of energy. The instruments we see as being appropriate and effective for this within the energy production sector are increased use of renewable sources, selected according to the specific conditions of the individual Member States, including the use of biomass in transport, the rational use of the potential of co-generation, increasing the global efficiency of electricity and heat production, while being aware that there are limits to the effectiveness of these measures. Another relatively straightforward contribution to reducing greenhouse gasses is using solar energy for heating water (for domestic consumption or heating) and the use of heat pumps which are now becoming economically viable for use on a small scale, such as in individual houses.

| 4.13 | Other instruments we consider effective include decarbonisation in electricity and heat production, including support for nuclear, solar and hydrogen technologies, particularly in research and development, and increasing the safety of production and consumption systems. On the energy conservation front, attention should be paid not only to the traditional reduction of energy consumption in industrial production, but also to the improvement of insulation properties of building and a significant growth in efficient public transport. These instruments will also require substantial resources for science and research and a major push for their implementation if the EU really wants to take on the leading role in the fight against climate change. |
| --- | --- |

4.13

Other instruments we consider effective include decarbonisation in electricity and heat production, including support for nuclear, solar and hydrogen technologies, particularly in research and development, and increasing the safety of production and consumption systems. On the energy conservation front, attention should be paid not only to the traditional reduction of energy consumption in industrial production, but also to the improvement of insulation properties of building and a significant growth in efficient public transport. These instruments will also require substantial resources for science and research and a major push for their implementation if the EU really wants to take on the leading role in the fight against climate change.

| 4.14 | All measures must be adopted only after thorough analysis of the implications and consequences, so that inappropriate steps should not endanger the competitiveness and the very ability to act of the EU as a whole and of the individual Member States. Support for energy from biomass, for example, must not be a threat to some branches of industry by destroying their sources of raw materials, and an increased energy price as a result of measures to suppress greenhouse gas emissions cannot become prohibitive and have a significant social fallout. |
| --- | --- |

4.14

All measures must be adopted only after thorough analysis of the implications and consequences, so that inappropriate steps should not endanger the competitiveness and the very ability to act of the EU as a whole and of the individual Member States. Support for energy from biomass, for example, must not be a threat to some branches of industry by destroying their sources of raw materials, and an increased energy price as a result of measures to suppress greenhouse gas emissions cannot become prohibitive and have a significant social fallout.

| 4.15 | The safety of the population requires that plans be made, adapted to regional circumstances, to limit the vulnerability to climate change and promote the development of warning and alarm systems linked to monitoring and systematic observation. Effective steps in this area will need in-depth strategic and economic analyses, including planning and allocating appropriate financing both at EU level and at national and regional levels. |
| --- | --- |

4.15

The safety of the population requires that plans be made, adapted to regional circumstances, to limit the vulnerability to climate change and promote the development of warning and alarm systems linked to monitoring and systematic observation. Effective steps in this area will need in-depth strategic and economic analyses, including planning and allocating appropriate financing both at EU level and at national and regional levels.

Brussels, 20 April 2006.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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(1)  IPCC Working Group 3 report ‘Climate Change 2001: Mitigation’, technical summary, p. 61.

1

(2)  Winning the Battle Against Global Climate Change: COM(2005)35, 9.2.2005, p. 15.

2

(3)  OJ L 275/32, 25.10.2003.

3

(4)  OJ L 283/33, 27.10.2001.

4

(5)  OJ L 123/42, 17.5.2003.

5

(6)  OJ L 525/50, 21.2.2004.

6

(7)  OJ 283/51, 31.10.2003.

7

(8)  COM(2003) 492 final.

8

(9)  Council Decision 2002/835/EC of 30 September 2002.

9

(10)  COM(2005)119, 6.4.2005.

10

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APPENDIX

to the opinion of the European Economic and Social Committee

The following amendment, which received at least a quarter of the votes cast, was defeated in the course of the debates:

‘Point 4.13

Other instruments we consider effective include decarbonisation in electricity and heat production, with the support of other available fuels and energy sources, especially solar and hydrogen technologies, particularly in research and development, and increasing the safety of production and consumption systems ...’

Reason

Deletion of the reference to nuclear energy ties in with the amendment to point 2.6.

Voting

For: 25

Against: 54

Abstentions: 12.

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