EN Official Journal of the European Union C 67/145

Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the 2015 International Climate Change Agreement: Shaping international climate policy beyond 2020’

COM(2013) 167 final

2014/C 67/29

Rapporteur: Josef ZBOŘIL

On 8 May 2013 the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on The 2015 International Climate Change Agreement: Shaping international climate policy beyond 2020

COM(2013) 167 final.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 1 October 2013.

At its 493rd plenary session, held on 16 and 17 October 2013 (meeting of 16 October), the European Economic and Social Committee adopted the following opinion by 120 votes to 3 with 9 abstentions.

1. Conclusions and recommendations

1.1 The EESC advocates that European engagement should be proactive, ambitious and realistic about what can be accomplished, in line with the EESC's opinion on the "Low Carbon Economy Roadmap 2050" (1), and adaptive to changes in the global environment. Reflecting all three pillars of sustainability as well as transparency and accountability are pre-requisites for any successful future climate agreement. An EU that is able to cope with external challenges will also be able to provide a new driving narrative for its citizens.

1.2 The Commission document provides a comprehensive basis for discussion on and preparations for the upcoming climate change negotiations, with a view to achieving a plausible global 2015 Agreement.

1.3 The Committee appreciates the move to address the important principles of the expected global deal, and supports the Commission as it undertakes the further preparatory work required to establish an inclusive, ambitious, effective, fair, equitable, transparent and binding framework for this deal. The international climate change negotiations should be a forum in which countries encourage each other forwards, not hold each other back.

1.4 Further work must focus on general acceptance of the global 2015 Agreement as the global geopolitical and economic map has changed significantly in a short period of time. These profound changes have to be taken into account and the role of EU climate and energy policy during the economic downturn and in the years to come must be carefully assessed. The EESC reiterates its position in the opinion on the 7th Environment Action Programme (2), that not only the financial and economic crisis but also the environmental crisis (one manifestation of which is climate change) have been triggered by excessive use of financial and natural resources, and that overcoming these crises will require a completely new approach, as embodied in the EU's sustainability strategy. The economy of the future will have to be largely based on non-fossil energy sources. Though the EU policy remains ambitious, the targets should be set step-wise in compliance with the global environment and any conditionalities must be clearly defined.

1.5 The international economic landscape and a generally accepted process of governance will ultimately shape further discussion about a future global climate treaty. The process will be driven by the key economic powers. The EU must be thoroughly prepared to play its global “leadership by example” role. However, the EU also has to be careful not to lose its current uncontested leadership in climate change matters and technological development. Further (unbiased) analysis is needed for the global assessment of the Kyoto Protocol, including all its pros and cons, and lessons must be learned with a view to designing the 2015 Agreement. The forthcoming (2014) IPCC Fifth Assessment Report will also set the stage.

1.6 The general scientific consensus currently remains that it would be completely intolerable to allow global temperatures to rise by more than 2 degrees above 1990 levels, and that the levels of greenhouse gases in the atmosphere will need to be stabilised at about present levels. For this to happen, greenhouse gas emissions have to be drastically reduced. At present however greenhouse gas levels are continuing to rise steadily year by year. It is positive that more efforts to limit emissions are being made, but they still fall far short of what is needed to achieve stabilisation. The general objective of the new round of negotiations must therefore be to inject a new urgency into the process and to secure much more ambitious commitments and action from all countries and all parts of society.

1.7 The interests of the negotiating parties must be analysed accurately and synergies identified in the preparatory stage to avoid potential conflicts of interest and to build on synergies. Ambitious and realistic measures and targets should be built up by consensus and through interaction with those who will be called upon to put the actions into effect. While recommending measures and targets, positive incentives could ease general acceptance and ensure thorough implementation.

1.8 This can only be achieved by a transparent and thorough assessment of the effectiveness, costs and positive impact of climate policies for the economy and society at large. The Committee agrees with the Commission in its statement that the 2015 Agreement must be inclusive by ensuring commitments that are "applicable to all" countries – developed and developing alike.

1.9 Activities and actions taken at the "ground level" (communities, sectors) without the new global climate agreement are a perfect example of the pro-active approach of the civil society at large. As the matter of fact, civil society must be a key player, not least in fulfilling the policies and targets of the 2015 Agreement. Civil society must also advocate greater political efforts, and hold decision-makers to promises of stronger climate protection (e.g. commitments to end fossil fuel subsidies). That is why the policies adopted must meet the transparency and accountability requirements expected by civil society avoiding social and economic inequities. The 2015 Agreement would be a first step on the global energy transition path.

1.10 To show leadership and have more influence on the international negotiations the EU needs to commit itself firmly to more demanding targets for 2020 and 2030 and to demonstrate how the implementation of such targets is an integral part of its plans for economic recovery and transition to a more sustainable future. The Committee therefore maintains its position of urging the full implementation of all existing carbon-related targets for 2020 and of reconsidering the tightening of the 2020 GHG target to a 25 % reduction on the way to the agreed 80-95 % reduction by 2050. The Committee continues to urge the EU to adopt indicative targets for GHG reductions of 40 % by 2030 and 60 % by 2040 and to follow-up with legally binding policies that would deliver these reductions. Such long-term indicative targets are needed as benchmarks to give predictability and stability for investors and decision takers within Europe. They would also provide a strong benchmark level of ambition for the international negotiations.

1.11 It is hard to imagine how the different interests of the major players alone can be reconciled in the existing negotiating format of "cap-and-trade". Many stakeholders are expressing reservations and suggesting alternatives for the future negotiating format. Fall-back options for a new concept for a deal should be investigated, based on projects such as "carbon budgeting", or a global "carbon levy", or the proposal tabled by India to allocate everybody living on the planet emissions rights, or a combination of these.

1.12 The EESC fully supports the Communication's position that we cannot wait until the 2015 Agreement is in force in 2020: the actions we take between now and 2020 will be crucial for setting policies on the right path. These actions must be well thought out and based on real and tangible achievements in the fields of science, technology and developments, as discussed by the EESC in its opinion on the "Low Carbon Economy Roadmap 2050" (3).

2. The Commission document

2.1 In 2011 the international community launched negotiations on a new international agreement to act collectively to protect the earth's climate system. This agreement, which is to be completed by the end of 2015 and to apply from 2020 onwards, is currently being negotiated through a process known as the "Durban Platform for Enhanced Action" (ADP).

2.2 The 2015 Agreement will have to bring together, by 2020, the current patchwork of binding and non-binding arrangements under the UN Framework Convention on Climate Change (Convention) into a single comprehensive regime.

2.3 The unilateral, or "bottom-up", nature of the Copenhagen-Cancun pledging process allowed for a more inclusive international approach.

2.4 In shaping the 2015 Agreement we will need to learn from the successes and shortcomings of the Convention, the Kyoto Protocol and the Copenhagen-Cancun process. We will need to move beyond the North-South paradigm reflecting the world in the 1990s towards one based on mutual interdependence and shared responsibility.

3. General comments

3.1 In its opinion on the 7th Environment Action Programme (4) the EESC has already emphasised the parallels between the financial and ecologic crises, both triggered by unsustainable use of economic or natural resources. In that opinion, it felt that "the response to the environmental crisis should be similar in design to the measures taken in the fiscal compact in response to the financial crisis, with clear requirements, clear indicators, checks and sanctions". This also applies to the forthcoming climate talks, which must send a clear message about developing a resource-efficient low-carbon global economy.

3.2 Important geopolitical changes have occurred and they need to be taken into account in preparation of the negotiation strategy. In a short period of time, the global geopolitical and economic map has undergone major changes. These profound changes have been triggered partly by the financial crisis, which is coupled with an economic crisis in the EU while the Business Investment Rate dropped from 23 points (2008) to 18,3 points (2013, first half)(Eurostat). The role of EU climate and energy policy during the economic downturn must be carefully assessed in shaping the coming negotiations.

3.3 These efforts are not yet sufficient. The international economic landscape will ultimately shape further discussion about a future global climate treaty, and the process will be driven by the key economic powers: China and the US, followed by India and the other BRICS countries (together responsible for 61,8 % of global emissions in 2012). In fact, 400-600 GWs of new coal-fired power generation will be built by 2020. The EU is in the midst of an economic downturn that has cost 3,8 million jobs and cut industrial production by roughly 20 %, while the number of employees in the sector of renewable energies and in energy saving measures increased.

3.4 However, there are very positive signs in the field of climate protection: — In the EU renewable power installations accounted for 71,3 % of new installations during 2011 (a total of 32,0 GW of new power capacity of 44,9 GW) in 2012, renewable power installations accounted for 69 % of new installations (31 GW of a total of 44,6 GW of new power capacity). In 2011, new coal-fired power plants with 2,1 GW were put into operation, but 840 MW of coal-fired power plants were decommissioned. In 2012, the capacity of decommissioned coal power plants (5,4 GW) even exceeded the newly commissioned capacity coal power plants (3,0 GW) almost by the double. — The high total emissions from China (26,7 % of global emissions) must be seen in relation to the proportion of the world's population (19 %). Compared with the EU (7 % share of the population, 11,5 % share of GHG emissions) or the U.S. (4,4 % share of the population and 16,8 % of total GHG) is the per-capita emissions in China is still relatively low. It has to be acknowledged that China has pledged to boost the employ of wind power and other renewable, by Increasing the share of non-fossil fuels in its overall energy mix, as it intends to cut its carbon emission intensity per unit of GDP by 40 % to 50 % by 2020. — In the U.S., renewable energies are developing rapidly, in 2012 wind power became the number one source of new electricity generation capacity for the first time in the U.S., accounting about 43 % of new electric additions with more than 13 GW added to the grid.

3.5 The world is not on track to meet the objective agreed by governments of limiting the long-term rise in the average global temperature to 2 degrees Celsius (°C). Global greenhouse gas emissions are rapidly increasing, and in May 2013 carbon dioxide (CO2) levels in the atmosphere exceeded 400 parts per million.

3.6 Policies that have already been implemented, or are now being pursued, are likely to lead to a long-term average temperature increase of between 3,6 °C and 5,3 °C (compared with pre-industrial age levels), with most of the increase occurring this century (based on climate modelling).

3.7 To have a realistic chance of meeting the 2 °C target, real action is needed before 2020, when a new international climate agreement is expected to come into force. Energy is at the heart of this challenge: the energy sector accounts for around two-thirds of greenhouse gas emissions, as more than 80 % of global energy consumption is based on fossil fuels.

3.8 Despite positive developments in some countries, global energy-related CO2 emissions increased by 1,4 % to reach 31.6 gigatonnes (Gt) in 2012 – a historic high. Non-OECD countries now account for 60 % of global emissions, up from 45 % in 2000. In 2012, China made the largest contribution to the increase in global CO2 emissions, but that increase was one of the lowest it has seen in a decade, which was driven largely by the deployment of renewables and a significant improvement in the energy-intensity of the Chinese economy.

3.9 In the United States, a switch from coal to gas in power generation helped reduce emissions by 200 million tonnes (Mt), bringing them back to the level of the mid-1990s. Despite an increase in coal use, emissions in Europe declined by 50 Mt as a result of economic contraction, growth in renewables and a cap on emissions from the industrial and power sectors. Emissions in Japan increased by 70 Mt, as efforts to improve energy efficiency did not fully offset the use of fossil fuels to compensate for a reduction in nuclear power. Even after allowing for policies now being pursued, global energy-related greenhouse gas emissions in 2020 are projected to be nearly 4 Gt CO2-equivalent (CO2-eq) higher than a level consistent with attaining the 2 °C target, highlighting the scale of the challenge still to be tackled in this decade alone.

3.10 International climate negotiations have resulted in a promise to reach a new global agreement by 2015, to come into force by 2020. But the economic crisis has had a negative impact on the pace of clean energy deployment and on carbon markets. Currently, 8 % of global CO2 emissions are subject to a carbon price, while 15 % receive an incentive of $110 per tonne in the form of fossil fuel subsidies (outside the EU countries). The EESC calls on the international community to follow through with the commitment set out in the conclusions of the 2012 United Nations Rio+20 conference, by introducing a binding requirement to end environmentally harmful fossil fuel subsidies - estimated by the World Bank at USD 780 billion per year - in the 2015 climate agreement.

3.11 Price dynamics between gas and coal are supporting emissions reductions in some regions but slowing them in others, while nuclear is facing difficulties and large-scale carbon capture and storage remains a distant prospect. Despite growing momentum to improve energy efficiency, there is still vast untapped economic potential. Non-hydro renewables, supported by targeted government policies, are enjoying double-digit growth of installed capacities. Investments in renewables would require stable economic environment both in carbon prices and, eventually, taxation in countries where the carbon tax is utilised.

4. Specific comments

4.1 How can the 2015 Agreement be designed to ensure that countries can pursue sustainable economic development while encouraging them to do their equitable and fair share in reducing global GHG emissions so that global emissions are put on a pathway that allows us to meet the below 2 °C objective? First of all, it is hard to imagine how the different interests of the major players alone can be reconciled in the existing negotiating format of "cap-and-trade", and yet equitable and fair contributions from all is the sine qua non of any future deal. Thus, at least as a fall-back option, a different concept for a deal should be developed, and governance issues acknowledge. Ways must be found to ensure that actions taken to address climate change can assist societal, economic and environmental growth and development. This can only be achieved by a transparent and thorough assessment of the effectiveness, costs and positive impact of climate policies for the economy and society at large. We should draw lessons from Kyoto, with all its complexity and loopholes. It should serve as a useful starting point for serious work on a new concept. The prolonged Kyoto II and its emission share coverage is a very strong signal, calling for conceptual change.

4.2 How can the 2015 Agreement best ensure the contribution of all major economies and sectors and minimise the potential risk of carbon leakage between highly competitive economies? Carbon leakage is a phenomenon that relates not just to energy-intensive industries potentially in decline – it is inherent in the general conditions of doing business in the individual economic area. An imbalance in carbon conditions, mainly between the most competitive regions, has caused investment in the EU to dry up. Ambitious and realistic measures and targets should be built up by consensus and through interaction with those who will be called upon to put the actions into effect. A simple, equitable and fair 2015 Agreement is thus a precondition for an equitable business environment in all regions of the global economy.

4.3 How can the 2015 Agreement most effectively encourage the mainstreaming of climate change in all relevant policy areas? How can it encourage complementary processes and initiatives, including those carried out by non-state actors? Obviously, the most effective way to encourage mainstreaming of the 2015 Agreement in all relevant policy areas is to keep it simple. Any excessive provisions aimed at organising this process would make the Agreement more difficult to implement. It is also important that the mainstreaming of climate change into other policy areas undergoes a transparent impact assessment. When including climate change in other policy areas, it is important to ensure that this is done in the most cost-effective and predictable way possible, without imposing an unnecessary administrative burden on stakeholders. Market-based approaches should be preferred.

4.4 What criteria and principles should guide the determination of an equitable distribution of mitigation commitments of Parties to the 2015 Agreement along a spectrum of commitments that reflect national circumstances, are widely perceived as equitable and fair and that are collectively sufficient avoiding any shortfall in ambition? Retaining "cap-and-trade" will require criteria and principles, and there would always be feelings of injustice and unfair treatment. However, in all cases consideration should be given to the market dynamics affecting a sector, existing and proposed climate change regulations that affect it, and the sector's maturity as regards its efforts to limit greenhouse gas emissions and utilise energy-efficiency technologies. To succeed and be sustainable, there must also be an incentive for all participants to work to achieve objectives, such as limiting emissions, improving efficiency, cooperating on research, sharing good practices, etc. A carbon levy can deliver emission savings and raise funding for research and development and adaptation in the most coordinated and efficient way.

4.5 What should be the role of the 2015 Agreement in addressing the adaptation challenge and how should this build on ongoing work under the Convention? How can the 2015 Agreement further incentivise the mainstreaming of adaptation into all relevant policy areas? Adaptation is in fact fairly well mapped and is based to a large extent on existing risk management programmes. While adaptation will not eliminate all risks from the impact of climate change, it will make an important contribution to limiting risks in many areas. Enhancing adaptive capacity will require further analysis, priority setting, planning and action at all levels of government, and requires the participation of local communities and business. Rightfully, adaptation is expected one of the four mainstays of the future 2015 Agreement. In particular, business shall play a role through technology transfer and the sharing of best practices.

4.6 What should be the future role of the Convention and specifically the 2015 Agreement in the decade up to 2030 with respect to finance, market-based mechanisms and technology? How can existing experience be built upon and frameworks further improved? The Convention should become a coordinating body for key climate measures, supervising countries' performance and major financial flows and technology exchange. Companies are largely responsible for technology and the deployment of technology. Through the Technology Executive Committee (TEC) and Climate Technology Centre and Network (CTCN), the Convention can provide expert analysis of technologies and give nations full access to information, enabling them to select the most appropriate technologies.

4.7 How could the 2015 Agreement further improve transparency and accountability of countries internationally? To what extent will an accounting system have to be standardised globally? How should countries be held accountable when they fail to meet their commitments? In any case, the accounting system needs to be standardised globally, no matter how this is achieved, since correct information is essential where money is involved. It is also a key to achieving accountability with regard to the 2015 Agreement.

4.8 How could the UN climate negotiating process be improved to better support reaching an inclusive, ambitious, effective and fair 2015 Agreement and ensuring its implementation? Wide stakeholder participation and a transparent process are necessary to ensure that the Agreement is reached satisfactorily and implemented. Business can offer its own expertise to the climate negotiations on effective ways to reduce emissions and develop solutions for sustainable development. Participation by the civil society and the business community at large can also ensure comparability of efforts and a level playing field. The new 2015 global Agreement is just the initial step forward, and the entire implementation of the Agreement would rely upon the civil society at large. Thus, the process and implementation outcomes must be transparent and convincing, winning confidence among the citizens worldwide.

4.9 How can the EU best invest in and support processes and initiatives outside the Convention to pave the way for an ambitious and effective 2015 agreement? The Committee welcomes the debate opened by this Commission document. Independent expert analysis of all aspects of climate policy is vital, especially in view of the changed and changing global geopolitical landscape. Some analysis is already available, so it is not necessary to start from scratch. One lead is the letter to the US President from his council of scientific advisors summarising the issues raised by climate change. The lesson of Kyoto and the protracted nature of UN negotiations also underline the need for change before it is too late. In addition, findings and recommendations made by expert organisations such as the IEA should and could be implemented without excessive delay. The IEA report "Redrawing the Energy Climate Map" offers a pragmatic and feasible approach. Four basic and achievable policies set out in the report are: improving energy efficiency in buildings, industry and transport; cutting construction and use of least-efficient coal plants; minimising methane emissions from oil and natural gas production and accelerating phase-out of some fossil-fuel consumption subsidies.

Brussels, 16 October 2013. The President of the European Economic and Social Committee Henri MALOSSE

(1) OJ C 376, 22.12.2011, p. 110-116.

(2) OJ C 161, 6.6.2013, pp. 77-81.

(3) OJ C 376, 22.12.2011, p. 110-116.

(4) OJ C 161, 6.6.2013, pp. 77-81.