Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - The energy dimension of climate change
Date: 1997-05-14
Institutions: European Commission
Subjects: EU programme, climate change, energy policy, environmental protection, greenhouse gas

COMMISSION OF THE  EUROPEAN  COMMUNITIES 

Brussels,  14.05.1997 
COM(97)  196  final 

COMMUNICATION FROM THE COMMISSION 

TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE ECONOMIC AND  SOCIAL COMMITTEE 
AND THE COMMITTEE OF THE REGIONS 

THE ENERGY DIMENSION OF 
CLIMATE CHANGE 

TABLE OF CONTENTS 

THE CHALLENGE 

The commitment to reduce emissions 

C02  Emission trends 
The need for policy decisions 

POTENTIAL AREAS  FOR ACTION IN ENERGY POLICY 

Energy Efficiency  and Energy Saving 

Greater co-operation with economic operators; role of environmental agreements 

Accelerating the penetration of renewable energy sources 

Better energy management at local, island and regional level 

Promoting combined heat and power production initiatives 

Electricity generation 

Integration with other policies 

Technology and Innovation 

Limiting other greenhouse gas emissions 

Fiscal instruments and resourcing 

REQUIREMENTS AND IMPLICA TIONS OF FUTURE POLICY CHOICES 

ANNEX 

/ 

1 

2 

4 

4 

4 

5 

5 

6 

7 

8 

9 

10 

10 

11 

11 

16 

1 

COMMISSION  COMMUNICATION  TO THE 
EUROPEAN PARLIAMENT, THE COUNCIL, THE ECONOMICAL AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS ON 
THE ENERGY DIMENSION OF CLIMATE CHANGE 

THE CHALLENGE 

The commitment to reduce emissions 

1.  Climate  change  is a subject  of  widespread  public  concern.  There  is a  growing  public 
expectation  and  political  pressure  that  climate  change  issues  are  dealt  with  in  the  wider 
framework  of sustainable development.  Policy makers have to respond to the need to take 
action  to reduce  emissions. The  real challenge  facing  the  European  Union  is to  adopt 
policies which are effective,  realistic and implementable. The political commitment to 
objectives therefore needs to be supported by the political willingness to act. 

2.  The  Third  Conference  of  the  Parties  to  the  United  Nations  Framework  Convention  on 
Climate  Change  (CQP-3)  to  be  held  in  Kyoto  in  December  1997  needs  to  produce 
decisions that the Parties and  society at  targe can accept and  can  carry out.  In the  context 
of the Berlin Mandate, the parties are at present engaged  in negotiations aimed at stepping 
up  the  commitments  of  the  industrialised  countries  through  the  adoption  of  quantified 
limitation  and reduction  objectives  within  specified  time  frames  such  as 2005l, 2010  and 
2020, to be achieved  by implementing  policies and measures.  The  ultimate  goal of these 
negotiations is to establish a legally binding protocol at the COP-3. 

3.  The  Council  conclusions  on  climate  change  of  3  March  1997  showed  the  Community's 
determination  to  act,  agreement  having  been  reached  that  the  Community  will  propose 
that the OECD member countries and the countries with economies in transition (Annex X 
to  the  Framework  Convention)  should  commit  themselves  to  a  .15%  reduction  in  their 
emissions  of the  main  greenhouse  gases  (C02,  CH4 and  N2O)2  by  2010,  both  compared 
with the reference year  1990. If we consider that CO 2 emissions, assuming the application 
of current policies and measures, are estimated to increase by some  8% in 2010  compared 
with  1990, there would  be  a  divergence  of  more  than  20  points  over  the  negotiation 
position  that  the  Council  has  set  itself.  To  cover  this  significant  gap,  policies  and 
measures will have to be ambitious, in particular in the field  of energy, and could  lead to a 
reorientation  of  society's  objectives.  It  will  require  genuine  political  will  to  bring  the 
necessary policies into being. 

4.  The decisions that will be taken at the Third Conference  of the Parties will therefore  have 
major  repercussions,  if the targets that will be negotiated  are to be achieved.  The  Council 
has taken the view that the decisions on the policies and measures to be adopted  should  be 
taken  at  the  Council  meetings  responsible  for  the  Community  policies  in  question.  The 
Commission  is  in  favour  of  an  approach  whereby  other  policies  which  cut  across 
environmental  protection policy are involved  in the decision-making  process. It intends to 
produce  later this year a broad  based  Communication  on climate change, outlining  all the 
policy  implications  and  actions  necessary  across  a  range  of  policies.  This  present 
Communication,  dedicated  to  the  energy  dimension  of  climate  change,  aims  to 

1  The Council has not yet taken a negotiation position for 2005 

2  C02 is the major greenhouse gas in the basket 

2 

stimulate  the  Kyoto  process  debate  and  focuses  on  the  implications  for  energy  in 
preparation  of  a  broader  Commission  Communication  covering  all  relevant  sectors 
to follow in the autumn.  The objective  is to outline the challenge posed to energy policy 
makers,  identify  a  number  of  areas  of  policy  action  which  may  help  face  this  challenge 
and  seek  to  stimulate  a  debate  as  to  how  the  commitments  we  undertake  for  emissions 
reduction can be fulfilled  in a cost effective  manner. 

5.  There clearly  exists within  the Community  a political  will  to achieve  a substantial  rate of 
reduction,  but  the  success  of  this  determination  will  only  be  demonstrated  once  the 
emission reduction  figures  indicated by the Council  have been reached. On the basis of its 
position  in  Kyoto,  the  Union  will  call  upon  other  Annex I  parties  to  the  Convention, 
namely  the  industrialised  countries  and  the  countries  in  transition,  to  make  comparable 
efforts.  The  Union  itself  must  however  also  show  its  political  willingness  to  take  the 
necessary, often  difficult,  decisions to implement  its targets. 

6.  As  a  starting  point,  the  contribution  of  common  and  co-ordinated  policies  is  necessary 
both  for  the  Community  and  for  the  Member States  so  that  appropriate  action  can  be 
decided  upon  in the  various  Councils  dealing  with  policies  and  measures  in  the  field  of 
economic  instruments,  taxation,  energy,  RTD,  industry,  transport  and  agriculture.  This 
communication  provides  a  first  analysis  of the contribution  that  the  energy  sector  would 
need  to  make  in  order  to  achieve  the  objective  agreed  upon.  Given  the  extent  of  the 
structural  changes  which  could  result  from  the  decisions  which  would  be  required  to 
implement  the  Kyoto  Protocol,  we  need  to  be  aware  of  the  fact  it  will  not  be  through 
gradual  change, but through  radical  changes  in the  political  choices, that the  imperatives 
of environmental protection and of sustainable economic development could be met. 

C 02  Emission trends 

7.  As  background  for  the  debate  the  Commission  has  recently  had  a  study  carried  out  to 
analyse how energy trends could evolve if the current situation continues.  This  pre-Kyoto 
scenario  is designed to examine the necessary  scale of policies and measures to achieve a 
limitation  and  reduction  of  greenhouse  gases.3The  pre-Kyoto  scenario  is  based  on 
"business  as usual" with  no new  policies  and  measures to  reduce  C02  emissions4.  With 
economic  growth  of  over  2%  per  annum  after  1990,  this  scenario  indicates  a  steady 
increase  in C02  emissions  of  8 % between  1990 and 2010 for  the European  Union  as  a 
whole.  A sectorial projection of C02  emissions gives the following  figures  (in millions of 
tonnes of  CO2) : 

A meeting  oil this study  was held  on  19 March  between  Member  States'  energy  analysts  and the 
Commission Services. 

There are other scenarios such as PRIME or BAT which, based on other assumptions and very specific 
policies and measures indicate that a reduction  of  10% in C02 emissions compared to  1990 can be 
achieved by 2010. 

Percentage  change  compared  with 199Ù 

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!  Total emissions 
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-  10% 
+ 9% 
- 3% 
- 5% 
+7% 
- 2% 

-  14% 
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- 1% 
- 2% 
+ 9% 
+ 2% 

-  15% 
+ 39% 
+ 4% 
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+ 8% 

J 

„ 

8. 

It should  also be noted that global  C02  emissions are predicted  to  increase  substantially 
over  the  next  two  decades.  This  strong  CO2  emission  increase  is  due  to  population 
growth  and  industrialisation  in Asia, Latin  America  and Africa.  About three  quarters  of 
the  projected  C02  emission  increase  by  2020  will  originate  from  developing  countries. 
The  share  of  Annex  I  countries  in  global  emissions  of  some  70%  in  1990  is bound  to 
decrease  significantly  in  the  next  few  decades.  By  2020,  the  contribution  of  Annex  1 
countries to global C02  emissions could be reduced to slightly over 50% .  The Union  is 
at  present  responsible  for  about  16%  of  global  energy  related  C 02  emissions  with 
only 6 %  of the world  population.  In a conventional  wisdom  development this share  is 
bound to decrease to some  12% . In the case of strong policy action, this share would  be 
even  lower  since  most  of the  action  must  be  undertaken  in  Annex  I  countries  and  the 
European  Community.  The  global  analysis  shows  that  even  strong  action  in  the 
Community can change world trends only to some extent. Co-operation  with  developing 
countries  is essential  . Nevertheless,  strong  Community  action  is needed  to  initiate  and 
support global endeavours. 

9.  The results of the pre-Kyoto  analysis quoted are based on the following  main assumptions: 

-  economic growth of 3% p.a. in the next years and  over the whole period between  1990 

and 2020 average GDP growth  of slightly over 2% p.a.; 

-  continued  increased output of heavy  industry; 

-  no new policies for influencing energy and transport demand; 

-  price for  imported  energy rise until 2020; the oil price  is assumed  at  32 (95)$ / bbl  in 
2020,  with  natural  gas  prices  increasing  in  line  with  the  oil  price  development,  and 
coal prices increasing at a slower pace; 

-  electricity  generation  investments determined  on the  basis of  long run  marginal  costs; 

the lifetime of nuclear power stations is assumed to be as long  as 40 years. 

As a consequence, 

•  energy  intensity  is assumed to fall  at an average rate of  1.3  % p.a. between  1990 and 
2020.. (Energy intensity should  improve by  1.3 % p.a. between  1995 and  2005, by  1.6 
%  p.a.  over  the  following  5 years  up  to  2010,  and  by  1.4  %  p.a.  between  2010  and 
2020). 

• 

there  is  no  significant  carbon  intensity  reductions.  The  rate  of  carbon  intensity 
improvement of  1.0%  p.a. in the first half of the  1990s is not expected to continue. It is 
assumed  that carbon  intensity  will  improve  at a rate  of  only  0.4  % p.a.  between  1995 

and  2005, and  by  0.3% in the  following  5 years  to 2010, there  might  be  a  reversal  of 
trends leading to an increase of carbon  intensity by 0.4% p.a. between 2010 and 2020. 

The need for policy decisions 

10.  The  desired  degree  of  C02  emission  reduction  determines  the  scale  of  the  policies  and 
measures  to  be  adopted.  With 
the  post  2000  trend  as  predicted  in  the  pre-Kyoto 
scenario,  achieving  a  15%  reduction  in  greenhouse  gases  by  2010  in  the  Union  will 
require  major  energy  policy  decisions,  focusing  on  reducing  energy  intensity  (in 
particular  through  energy  management  and  energy  saving)  and  carbon  intensity  (in 
particular by promoting renewables) at constant GDP. 

11.  There  are  different  combinations  of  policies  and  instruments  which  can  be  applied  in 
order  to  reduce  greenhouse  emissions.  Decisions  will  need  to  be  taken  as  to  the 
directions that  should  be taken. The most cost-effective  package of measures to  achieve 
the desired environmental  result need to be  identified. 

12.  In determining the best of the available options, more specific  decisions need to be taken 
as to what  legislative and voluntary measures  may be required, whether we should  adopt 
a  specific  fuel  mix  strategy,  whether  to  set  targets  for  energy  intensity  or  renewables 
penetration,  and  to what  extent  implementation  of the  measures  wi!l  be  shared  between 
governments and  industry and other economic sectors. 

13.  We must  be  aware  of the  fact  that  facing  this  major  challenge  will  require  mobilisation 
of resources. The questions  of what are the costs  involved  and what  resources the Union 
and individual Member States are prepared to allocate need to be addressed. 

14.  The  purpose  of  this  Communication  is to  stimulate  this  debate  both  inside  and  outside 
the  Community  Institutions, as regards  specifically  the energy  sector.  There  are  no easy 
answers, but the magnitude of the problem  of facing  anthropogenic  climate change must 
not impede us from  searching for the most effective  and practicable solutions. In order to 
provide  a  basis  for  discussion  on  policy  decision  to  be  taken,  some  potential  areas  of 
action are presented  in this  Communication. 

POTENTIAL AREAS FOR ACTION IN ENERGY POLICY 

Energy  Efficiency  and Energy  Saving 

Î5.  Energy  saving  is  as  a  very  effective  and  often  "cost-free"  way  of  reducing  greenhouse 
gases.  "Unused"  energy  sources  in  fact  correspond  best  to  the  concept  of  sustainable 
development.  In  addition  they  reduce  energy  imports  and  increase  security  of  supply 
while  creating  related  jobs.  Energy  consumption  does  not  necessarily  have  to  grow, 
even  if GDP  is growing.  However,  in the pre-Kyoto  study, a steady  increase  in  demand 
is  predicted  despite  the  assumption  of  a fall  in  energy  intensity  of  1.3%  between  1995 
and  2005, and  1.6?/o between  2005  and 2010.  A proactive  energy  management  policy 
promoting  energy  saving  and  energy  efficiency  is  seeded  to  realise  the  often 
numerous  cost  free  opportunities  and  to  curb  this  demand  growth.  This  has  to  be 
complemented  by measures based on the price mechanism. 

16.  The  SAVE  programme  is  an  important  element  of  the  Community's  C02  reduction 
strategy.  The  JOULE-THERMIE  also  supports  research  and  demonstration  for  new 
energy  saving technology.  However,  it should  be recognised  that the  obstacles to  energy 
efficiency  and  energy  saving are not mainly technological.  That  is why  under  SAVE  I a 
series  of  legislative  proposal  were  made.  A  European  energy  consumption  !abelling 

system  for household  appliances  has been  introduced  and efficiency  standards  for  boilers, 
refrigerators  and  freezers  have  been  set  but  there  is  scope  for  much  more  action  to 
promote energy saving. 

Î7.  The  experience  of  SAVE  shows that the  Council  has not  always  been  willing  to  play  its 
role  in the adoption  of certain  energy efficiency  legislation  and the  provision  of  financial 
resources  commensurate  with  the  energy  saving  potential  in  the  Community'  and  the 
climate change  issues. New  commitments  for emission  reductions  must lead to serious 
reflection  on  how  to  go  well  beyond  what  has  been  achieved  in  recent  years  for 
energy saving. 

18. The Commission has attempted to encourage electricity and gas distribution  companies to 
regard themselves  not as suppliers but as service companies; this could  lead to  significant 
reduction  in energy demand which will be particularly effective  in the domestic sector. To 
this  end, the Commission  has  submitted  a proposal  for  a directive  encouraging  the  use of 
rational  planning  techniques  in  the  supply  and  demand  cycle.  This  has  not  yet  been 
adopted  by Council. Energy  undertakings  need to be transformed  into energy  service 
companies to offer  consumers  a whole  range of energy services which will  ultimately 
save  them  energy  while  offering  a  better  quality  of  service.  The  Commission  will 
promote the dialogue with the energy  supply  industry with  the view to promoting  energy 
saving  services  and  more  efficient  energy  production.  Priority  also  needs  to  be  given  to 
the concept of efficient  and economic energy services  in RTD activities, especially  for the 
short and medium terms. 

Greater  co-operation  with  economic operators; role of environmental  agreements 

19.  While  recognising  that  progress  towards  energy  saving  and  energy  efficiency  has  been 
made  in  recent  years  by  industry,  more  action  is  needed,  including  in  the  area  of 
environmental  agreements.  Long-term  agreements  are tools  which  should  be  developed 
where  appropriate.  Successfully  applied  throughout  the  Union,  this  instrument  could 
improve  energy efficiency  and  bring about a significant  reduction  in CO2 emissions.  In 
addition, there  is a considerable  scope for  reducing C02  emissions  in the motor  vehicles 
sector  and  large  firms  should  be  encouraged  to  get  involved  in  this  process  on  a 
voluntary basis5. 

Accelerating the penetration of renewable energy sources 

20.  Although  efforts  have  been  made  in  Europe,  and  elsewhere,  for  more  than  20  years  to 
encourage  the  use  of  renewables,  the  economic  potential  available  has  been  far  from 
fully  exploited.  In  November  1996  the  Commission  published  a  Green  Paper6  on  a 
strategy  to  increase  the  penetration  of  renewable  energy  sources  which  are  capable  of 
underpinning  sustainable  development  in  the  long  run  since  they  generally  do  not 
produce  net  C 02,  they  do not entail  technological  hazards, they  are,  indigenous  energy 
sources and present many other advantages. 

21.  The  Commission  takes the view that  a doubling of the share accounted  for  by  these 
energy  sources  by  2010  (from  6%  to  12%)  could  be  an  ambitious  but  realistic 
objective.  The  implications  of  increasing  the  share  of  renewables  are  analysed  for 

Example : Commitment on the part of FIAT towards the Italian government to reduce by 20 % C02 
emissions 

COM(96) 576 of 20 November 1996. 

example  under  the  TERES  II  study,  in  particular  with  respect  to  parameters  including 
C02  emissions, security of supply and employment.  With  respect to C02  emissions, the 
"Best  Practice  Policy"  scenario  of  12.5%  share  of  renewables  predicts  a  reduction  in 
C02  emissions  of  386  million  tonnes  per  year  by  2010  (representing  12%  of  C02 
emissions), calculated  using the SAFIRE model. 

22.  Political  determination  is  needed  to  take  actions  which  will  help  increase  significantly 
the  share  of  renewables.  Not  only  would  these  energy  sources  make  a  significant 
contribution  towards  limiting  our  own  greenhouse  gas  emissions,  but  given  the  even 
greater potential  in the developing countries, they would  also make  it possible to  ensure 
the supply  of energy  with  a low environmental  impact  in areas  not yet  connected  up to 
energy networks.  In the context of the Community  programmes, and especially  the 
JOULE-THERMIE  programme,  several  technologies  in  the  field  of  renewables 
have  been  developed  and  their  competitiveness  proved  (e.g.  for  biomass,  wind 
energy  and  photovoltaic  energy).  Many  of  the  latter  are  deployed  in  decentralised 
integration,  it is  important  that they  should  also  be 
systems.  To  increase their  market 
integrated 
in  the  centralised  systems;  this  will  be  facilitated  by  stepping  up 
demonstration  and dissemination  activities. 

23.  The  links  between  agriculture  and  forestry,  environment  and  energy  need  to  be 
highlighted.  Biomass  is an  energy  source  which  could  make  a  significant  contribution 
towards  the  efforts  to  combat  climate  change.  Agriculture  and  forestry  could  help  to 
absorb  C02  through  the  development  of  carbon  sinks  which  could  then  be  used  for 
energy purposes.  Research, technological development  and demonstration  activities and 
tax  measures  should  be  stepped  up  so  that  this  option  becomes  an  economic  reality 
through  an  reinforcement  of  research,  demonstration  and  dissemination  activities,  and 
also by social and economic research activities in the field of market integration process. 

24.  The  continuation  of  the  process  of  removing  barriers  to  the  more  widespread  use  of 
renewables  through  harmonisation,  standards,  and  financial  assistance  for  pilot  and 
information  schemes  are  objectives  set  out  in  the  Commission's  new  proposal 
concerning  the  ALTENER  programme.  The  Council  needs  to  adopt  this  programme 
rapidly, and, in order for  it to make a valid  contribution  to the  promotion  of renewables, 
sufficient  resources must be allocated to the programme. 

25.  It  is  important  to  promote  dialogue  with  the  electricity  generating  companies  aiming  at 
achieving  an  undertaking  on  their  part  to  produce  a  non-marginai  quantity  of  electricity 
from  renewable  energy  sources.  Schemes  in  progress  in  certain  Member  States  in  this 
area  show  that  this  obligation  helps  to  create  a  climate  favourable  to  the  penetration  of 
renewables.  Additional  consideration  also  needs  to  be  given  to  various  incentives  for 
promoting  renewables.  The  Commission  is reflecting  on  proposals  in this  connection,  in 
particular  by examining the possibility of guaranteeing  a minimum  price  for  these  energy 
sources. 

26.  The  reaction  to  the  Green  Paper  so  far  from  the  vast  majority  of  interested  parties 
supports the Commission's point of view on the need to significantly  increase the share of 
renewables.  The  Commission  will  make  concrete  proposals  in  the  White  Paper  and 
Action Plan in preparation.  The measures to be taken should be commensurate with the 
objectives  to be set. Member  States also need to develop their own  national  strategies  for 
the promotion of renewable energy sources. 

Better energy management at island, local, and regional level 

27.  Greater  decentralisation  of  energy  management  and  increased  public  involvement  will 
contribute  towards  better  management  of  global  issues  and  greater  control  over  the 

increase  in  energy  demand.  The June  1996 Habitat II  Conference  in  Istanbul  recognised 
that the bulk of population  growth  will take place  in towns and cities which  now account 
for  75%  of  the  population  of  the  Union  and  70%  of  its  energy  consumption.  This 
means  that  attention  should 
increasingly  be  focused  on  the  problems  of  energy 
management  in  urban  centres.  The  Commission  and  the  Member States  should  give 
priority to RTD activities  in towns and cities, taking  full  account  of the  energy  aspects  in 
preparation for the key action of the 5th FP "City of Tomorrow". 

28.  The  local  and  regional  authorities  have  many  powers  in  the  services,  housing  and 
transport  sectors.  As  a result  of  its  programme  of  energy  management  at  regional  and 
local  level,  which  is now  part  of the  SAVE programme,  the  Commission  is  encouraging 
the  involvement  of  elected  representatives,  alongside  the  other  local  partners  concerned, 
by  supporting  the  establishment  of  energy  management  agencies  in  regions,  islands  and 
cities. The main role of the Energy agencies is to promote energy  saving and  renewables. 
There  are  also  useful  networks  set  up7  whose  role  should  be  expanded  in  order  to 
promote transnational schemes. 

29.  AH the  public  contracts  awarded  by the  local  and  regional  authorities  in  the  Union 
represent  an  enormous  energy  saving  potential.  They  should  take  account  of  the 
energy  dimension  and  of  climate  change.  The  public  authorities  could  thus  play  a 
leading  role  in  the  adoption  of  products  entailing  less  energy  consumption  and  hence 
producing fewer greenhouse gas emissions.  The local and regional authorities could also 
automatically  incorporate energy management principles  in their new buildings.  Studies 
have  shown  that  certain  public  buildings  in  one  and  the  same  area  can  consume  up  to 
four times as much energy as others. 

30.  There  is  significant  C02  reduction  potential  to  be  exploited  at  the  local  and  regional 
level. The Committee of Regions could  play an important role particularly  in  promoting 
energy  saving  and  renewable  energy  sources  alongside  the  other  relevant  levels  of 
decision making. 

Promoting combined heat and power production  initiatives 

31. The technologies  for electricity  production  and  cogeneration  has been  progressing 
rapidly,  so  that  considerable  efficiency  improvements  can  be  expected  through  the 
deployment  of  best  available  technology.  In  many  cases,  such  advanced  technologies 
also  offer  advantages  in  terms  of  cost-effectiveness.  The  Commission  is  preparing  a 
communication  on  cogeneration  in  order  to  promote  its  use.  There  are  already  many 
examples  in certain  Member States which demonstrate the merits  of this  technologically 
mature  option  though  there  is  great  variation  between  Member  States  as  regards  its 
penetration. 

32.  The  synergy  between  combined  heat  and  power  production  and  district  heating  or 
cooling networks  needs to  be better  exploited.  The  use of biomass  in cogeneration  is a 
factor  facilitating  the  penetration  of  this  option.  One  way  of  accelerating  the 
introduction  of cogeneration  is the third party financing (TPF) concept which  should  be 
promoted  among  the  financial  institutions  so  that  they  make  greater  use  of  it.  In  a 
market  economy context,  in the  long run  cogeneration  is  likely to be developed  if there 
are  transparent  and  fair  rules  with  regard  to  the  quantity  and  price  of  the  electricity 
produced; and if the new gas contract situation ensures competitiveness. 

FEDARENE for regions, ENERGIE CITES for towns and cities, and ISLENET for islands. 

33. 

It  is  worth  noting  that  even  a  significant  penetration  of  cogeneration  would  not  be 
sufficient  to  avoid  an  overall  increase  in  C02  emissions.  However,  the  Commission 
believes that there  is scope for cogeneration  to contribute to emission  reduction 

Electricity  generation 

34.  Developments  in  the  electricity  /heat  generation  sector  are  crucial  for  overall  C02 
emission  trends.  This  sector  not  only  accounts  for  about  a  third  of  total  emissions, 
but it is capable  of limiting  C02  despite  growing  electricity  and  heat demand.  In the 
Pre-Kyoto  scenario,  power  station  C02  emissions  are  expected  to  remain  close  to  their 
1990 level up to 2010. 

In  addition,  the  process  of  establishing  transeuropean  networks  now  in  progress  is 
intended  to  ensure  optimum  utilisation  of  electricity  generation  capacities  throughout  the 
Union  and  supply  low carbon  fuels  to regions of Europe  in which  such  products  were  not 
hitherto available. 

35.  However,  while  there  is  little  scope  for  fuel  switching  in  the  transport  sector,  the 
electricity  sector  offers  various  possibilities  for  introducing  or  maintaining  zero  carbon 
fuels  or increasing the use of low carbon  fuels. C02 policies and measures should  consider 
the  role  that  electricity  can  play  as  one  of  the  major  elements  in  the  development  of 
innovative  means  of  production,  communication  and  mobility  which  could  abate  C02 
emissions by reducing carbon  intensity and energy  intensity. The following  table shows in 
detail  the  development  of  C02  emissions  from  the  production  of  electricity  and  heat  as 
well as energy intensity and carbon  intensity  in this sector. 

Average  annual change (% per  annum) 

I 

1990-2000 

2000-2010 

1990-2010 

C02  emissions 
Energy intensity 
Carbon  intensity 

- 0.2% 
-0.5% 
-  1.7% 

+ 0.3% 
-1.5% 
- 0.5% 

+0.1% 
-1.0% 
- 1.1% 

{pre-Kyoto study) 

The  services  of  the  Commission  are  completing  with  the  European  Electricity  Supply 
Industry  a  major  review  of  the  potential  contribution  of  electricity  to  sustainable 
development and  in particular meeting the challenge of climate change. 

36  As  a  result  of  technological  progress  since  the  industrial  revolution  there  has  been  a 
constant  improvement  in the efficiency  of power  stations.  This  improvement  should 
continue  or  even  increase,  since  there  is  still  an  insufficiently  exploited  theoretical 
potential.  For  example,  the  penetration  of  clean  and  efficient  natural  gas,  coal  and 
lignite  combustion  technologies  could  improve  electricity  generating  efficiency  by 
5-10%, resulting  in a reduction  in  fuel  costs  and  a  15-30% reduction  in  greenhouse  gas 
emissions.  The overall  impact  will depend  to a large extent on the degree of  penetration 
of  technologies  in  the  Union  and  in  a  large  part  of  the  planet  which  will  be  making 
greater  use of solid fuel  (China, India, ASEAN, etc.). A Community  programme for clean 
and  efficient 
technologies  using  solid  fuel  and  other  heavy  products  could  be 
appropriate, 

37 Mention  needs to  be made  of the  contribution  of nuclear  energy  to  limiting  greenhouse 
gases.  According  to  current  plans,  the  installed  nuclear  capacity  in  the  Community  is 
likely  to  increase  only  slightly  in  the  next  few  years.  Between  now  and  2010,  nuclear 
energy  can  be  expected  to  continue  to  contribute,  although  to  a  lesser  extent,  towards 
limiting the growth of greenhouse gas emissions. After  2010, a number of nuclear  power 

plants will enter the decommissioning phase. The longer term  issues concerning nuclear 
power are outlined in the Commission's Indicative Nuclear Programme.8 

38.  There  is currently rapid  penetration  of the electricity  sector by natural  gas,  but  this will 
probably have reached  a maximum  rate of  penetration  in  2010.  After  that  in  particular 
for  reasons  of  security  of  supply,  serious  consideration  will  need  to  be  given  to  this 
level of penetration. 

39.  It is clear that the current overall energy consumption  is incompatible with the  long-term 
requirements for sustainable development. A significant  limitation  of tfee use  of  fossil 
fuels  is  required  to  ensure  that  the  Community  can  meet  its  emissions  reduction 
objectives contemplated  m  the Protocol  on the Climate Change  Convention. This  is 
by  now  widely  recognised  by  main  international  organisations,  national  governments, 
and perhaps most importantly, large segments of the energy industry itself. 

Integration with other policies 

40.  Since  energy  demand  is  dependent  on  other  economic  activities,  it  is  important  that 
energy  demand  management  principles  should  be  applied  so  that,  for  a  given  quality  of 
energy  service,  the  increase  in  demand  is  as  low  as  possible  and  efficiency  as  high  as 
possible.  In  this  context,  other  policies,  in  particular  agricultural  and  forestry  policy, 
environmental  protection  and  waste  management  policy,  transport  policy,  research  and 
development  policy,  fiscal  policy,  regional  planning  policy,  and  regional  and  local 
development  policy  should  gradually  incorporate  objectives  regarding  the  reduction  of 
greenhouse  gas  emissions  and  the  development  of  carbon  sinks.  The  Commission  will 
provide  an  overall  view  in  a  Communication  later  in  1997  which  will  integrate  all  the 
measures in relation to climate change in all the policy areas. 

41. It is important to consider  how the  Structural  Funds and the Cohesion  Fund  might  be 
used  to  an  even  greater  extent  to  provide  funding  for  projects  reducing  greenhouse 
gas  emissions,  particularly  in  relation  to  renewable  energies  and  carbon  sinks.  In 
addition to energy projectsper se, infrastructure  projects could also make a contribution  to 
the  action  to  combat  climate  change.  Future  programmes  and  measures  under  the 
Structural Funds need to take account of this. 

42.  Measures  to  combat  climate  change  will  also  entail  the  creation  of jobs  in  specific 
related  sectors.  The  Commission  in  co-operation  with  Member  States  should  make  a 
detailed  study  of the job-creation  impact  of measures to  combat  climate  change.  Greater 
effort  should  be  also  made  concerning  training.  For  example,  the  ECDVT  (European 
Centre for the Development  of Vocational  Training) should  establish  energy management 
orientated  profiles. 

43. Where the common agricultural policy (CAP) is concerned, an initiative concerning  the 
use  of  biomass  to  produce  energy  in  the  context  of  the  reform  of  the  CAP  could 
represent  another  practical  option  which  is  virtually  neutral  from  the  point  of  view  of 
greenhouse  gases  emissions.  Properly  thought  out,  this  solution  could  also  contribute 
towards  furthering 
Improving  energy  efficiency  and 
developing  biofuels  in  agriculture  are  also  viable  solutions  which  should  be  studied  in 
greater detail. The development of C02  sinks should also be carried  out  in those  countries 
where it is needed. 

the  objectives  of  the  CAP. 

COM(96) 339 of 25 September  1996 - Indicative nuclear programme with the meaning of Article 40 
of the Euratom Treaty. 

iU 

Technology and  Innovation 

44.  The  recent  adoption  of  the  Commission  proposal  for  the  fifth  research  and 
technological  development  framework  programme  (FP 5) coincides with  the  Kyoto 
Agenda.  Close  and  continuous  co-ordination  of  RTD  policy  and  energy  policy  is 
essential.  Clean  technologies  can  make  a positive  contribution,  the  results  of  which  are 
lasting.  The  FP 5,  and  in  particular  the  key  action  "systems  and  advanced  energy 
services"  and  the  current  "JOULE-THERMIE"  and  "Environment  and  Climate"  RTD 
Programmes,  should  assign  an  important  role  to  activities  promoting  technologies 
whose energy efficiency  and carbon  efficiency  represent  major  improvements  compared 
with what is currently available on the market. 

45.  Efficient  and  sustainable  energy  services  should  be  developed  through  the  use  of 
various  energy  technologies.  On  the  energy  supply  side,  mention  can  be  made  of  the 
following:  combine  cycles,  clean  coal,  fuel  cells,  renewables  (wind,  biomass,  solar-
thermal,  solar  photovoltaic),  new  thermodynamic  cycles,  etc.  On  the  demand  side, 
efforts  should  continue  to  be  made  in  the  field  of  new  vehicles  and  engines, 
improvements 
in  the  efficiency  of  household  appliances  (in  particular  cooling 
equipment),  electrotechnical  equipment,  electronic  energy-control  devices  in  the  home, 
development  of  the  City  of  the  Future,  etc.  Social  research,  should  also  be  reinforced 
since  not  enough  attention  has  yet  been  paid  to  examining  consumer  behaviour  when 
faced  with energy choices, in particular the reaction of the public as energy consumers. 

Limiting other greenhouse gas emissions 

46.  Apart  from  C02  emissions, coal-mines are a major source of methane  emissions, and 
natural  gas  production  and  distribution  inevitably  entails  gas  leakage's.9  Where 
emissions  due  to  coal-mining  are  concerned,  preventive  techniques  are  used  to  a  large 
extent  within  the  Union.  This  should  be  disseminated  to  our  partners  in  the  associated 
.  countries.  Where  natural  gas  is  concerned,  it  is  necessary  to  tighten  up  controls  with 
regard  to  the  quality  of  distribution  networks,  so  as to  limit  leakage's.  In  this  area,  the 
Commission  will encourage voluntary agreements with the gas industry.10  Here too, it is 
necessary  to  increase  the  transfer  of  know-how  and  good  practices  to  third  countries. 
Applied  research  in the  gas production  and transportation  sector  should  also  be  stepped 
up to bring about improvements which are also economically justified. 

47.  Although  the  waste  sector  is  not  directly  connected  with  the  energy  sector,  there  are 
sometimes  synergies  between  these  sectors. With the abundance  of  energy  sources,  this 
sector can quite easily  do without the production  of energy from  waste. However,  waste 
management  is  a  major  concern  of  local  authorities  and  while  giving  top  priority  to 
recycling,  there  may  remain  a  final  fraction  to  be  landfilled,  which  will  inevitably 
produce methane  emissions.  In such cases, landfill  gas should  be recovered  and  used to 
produce  energy,  or  at  least  burned.  Composting  the  organic  faction  of  waste  can  also 
make  a  significant  energy  contribution.  On  the  other  hand,  where  economically  and 
environmentally justified,  certain  waste  could  be  burned  with  a net  energy  recovery.  In 

In  its  communication  COM(96)557 final on  methane  dated  15 November  1996,  the  Commission 
proposed various measures that it intends to promote in order to limit such emissions. 

10 

For  example,  the  gas  industry  in  the  Netherlands  has  concluded  a  voluntary  agreement  with  the 
government, undertaking to reduce methane emissions by 10%. 

11 

the  framework  of  the  waste  strategy,  legislative  and  technological  actions  in  favour  of 
minimising greenhouse gases emissions will be presented. 

48.  Last but not least, with  regard to emissions of N20, fluidised  bed combustion,  one of the 
most  promising  technologies  as  regards  the  clean  combustion  of  solid  fuels,  produces 
small  quantities  of  greenhouse  gas. In  the  context  of  the  research  programmes,  greater 
importance should  be given to understanding the mechanisms  giving  rise to this gas and 
means of mitigating  it.  Several  research  projects  from  the  "Environment  and  Climate" 
programme  deal  with  emissions,  atmospheric  balances  and  impacts  on  climate  of 
greenhouse gases other that C02. 

Fiscal instruments and  resourcing 

49.  On  12  March  1997  the  Commission  adopted  a  proposal  for  a  directive  extending  the 
Community  system  of  minimum  rates  of  excise  duties  to  all  energy  products.  By 
differentiating  between  renewable energy  sources, energy efficiency  and  innovation,  the 
proposal  endorses  the  approach  pursued  in  this  Communication.  In  addition  to 
restructuring  the  tax  system,  it  also  contributes  towards  the  complex  task  of 
internalisation  of  external  costs.  The  Commission  advocated  applying  this  principle  in 
1993 in its White Paper on growth, competitiveness and employment. 

50.  If  greenhouse  gas  emissions  in  the  Union  are  to  be  reduced  by  approximately  20% 
compared  with  the  pre-Kyoto  scenario,  an  ambitious  programme  of  polkies  and 
measures  will  be  required..  The  experience  in  certain  Member  States  can  provide 
guidance  as  to  the  direction  to  be  taken.  Measures  such  as  "green  loans"  in  the 
Netherlands or "green electricity" purchased by certain consumers in Germany should be 
examined and made use of,  where appropriate, at Community  level, as should the French 
biofuels  pilot  projects.  Another  idea  was  put  forward  in  the  Green  Paper  on  a 
Community strategy for renewable energy sources: a renewable energy credit  system. 

51.  If  a  major  new  policy  initiative  is  required,  we  may  need  to  examine  very  carefully 
the  merits of mobilisation  of funds  at the  appropriate  level  so as to provide  resources  for 
funds  earmarked  for  energy  management  and  renewables.  In  1995 energy  expenditure 
in  the  Union  amounted  to  over  ECU 500 000 million  which  shows  that  it  should  be 
possible  to  raise  funds  to  finance  at  the  appropriate  level  energy  management  and  the 
penetration  of renewables. Consequently,  a  minimum  contribution  would  be  sufficient 
to  raise  funds  to  ensure  that  the  policies  and  measures  adopted  post-Kyoto  are 
implemented.  Experience  in  the  United  Kingdom  with  regard  to  non-fossil 
fuel 
obligations  and  the  other  trials  mentioned  above justify  an  examination  in  the  general 
interest 

REQUIREMENTS AND IMPLICATIONS OF FUTURE POLICY CHOICES 

52.  The  table  below  indicates  the  annual  average  change  in  GDP,  energy  intensity,  carbon 

intensity and C02 emissions, which  illustrates the scale of the challenges we face. 

1990-2000 

2000-2010 

1990-2010 

GDP growth 
Energy intensity 
Carbon intensity 
CQ2 emissions 

+2.1% 
-1.0% 
-0.90% 
+ 0.2% 
{pre-Kyoto study) 

+ 2.4% 
-1.6% 
-0.2% 
+0.6% 

: 

+ 2.2% 
- 1 . 3% 
-0.5% 
+0.4% 

| 

j 

12 

53.  The  impact  and  cost  of  a  commitment  at  Kyoto  of  a  15%  reduction  in  greenhouse 
emissions  has  not  yet  been  fully  assessed.  It  could  however  be  considerable.  As 
background to the debate on the implications of choices made, it is worth  noting that there 
are  several  Commission  studies,  based  on  different  assumptions,  exploring  the  possible 
scenarios  for  a  reduction  of  greenhouse  gas  emissions.  One  of  the  studies  undertaken  by 
the  Commission  is the  "European  Energy  2020  study"11,  where  the  "Forum" scenario 
indicates that considerable  changes will  need to be made to the current  structures  in order 
to  achieve  an  emission  reduction  of  some  6%  in  2010.  This  scenario  presented  an 
attractive energy  future,  especially for the environment and the security of energy supply. 

54.  It  is  also  worth  noting,  that  in  order  to  achieve  the  6%  emission  reduction  under  this 
forum  scenario  it is assumed  that there  is a change  in the sources of government  finances, 
with a gradual  switch  in taxation  from  labour to natural  resources, reaching  1,5 of GDP by 
2005.  Compared  to  the pre-Kyoto  scenario  outlined  in  this  Communication,  under  the 
Forum  scenario the cost of energy in 2010 will be higher. 

55. For a Forum  scenario to be achieved by 2010, the following  are prerequisites: 

•  considerable  intensity  and  efficiency  gains  in  all  end-use  sectors  and  in  power 

generation; 

•  a clear decoupling of C02  emissions from  GDP growth, because of combined  results in 

energy savings and carbon-free  energy supply actions; 

•  new supply structures  in power generation,  in favour  of decentralised generation  (heat, 
renewables, biomass, fuel  cells), in biofuel  production,  in hydrogen  production  and the 
market penetration  of fuel  cell and electric vehicles. 

•  agricultural policy in favour of biomass; 

•  a combination  of taxation  policy and favourable  conditions  in capital  markets  resulting 
in low discount rates, despite an international  environment characterised  by low  import 
prices for  fuels; 

56.  An  estimation  of  investment  requirements  in  Forum  indicates  that  more  than  391000 
MECU  investment  for  electricity  generation  and  refineries  would  be  necessary  for  the 
period  1991 to 2010. 

57.  The  example  of this  Forum  scenario  shows  that  there  are  ways  of  reducing  by  some  6% 
the CO2 emissions  in 2010 if we take quite radical measures. This  is one of many  possible 
scenarios, mentioned here by way of illustration. This does not imply that the Commission 
favours the specific  policy proposals in any particular  scenario. 

Another  scenario  using  the  PRIMES  model,  indicates  that  a  10%  reduction  of  C02 
emissions  by  2010  compared  to  1990  can  be  achieved  by  a  combination  of  measures. 
These  include  promotion  of  energy  efficiency  and  energy  saving,  higher  penetration  of 
combined  heat  and  power,  changes  in  fuel  mix  and  reduction  in  fuel  consumption  in 
transport.  The  achievement  of  10% emission  reduction  under  this  scenario  also  implies  a 
10%  share  of renewable  energy  sources  by 2010.  Another  ongoing  analysis  of the  Kyoto 
emission  reduction  targets,  using  the  PRIMES  model,  indicates  that  the  application  of 

SEC (95) 2283 of 20/12/95 

13 

Best  Available  Technologies, (BAT)^though  not enough  by  itself,  can  make  a  significant 
contribution to emission  reduction. 

58. The  policies  and  measures  that  the  Community  should  launch  in  order  to  make  up 
the 20% gap between  the expected  rise  in emissions  of  8% and  a committed  reduction 
of  15%  will  have  to  take  account  of  the  constraints  imposed  by  the  Union's  new 
financial, perspective.  The  Commission  needs  to  address  as  a  matter  of  urgency  the 
quantification  of  the  cost  -  at  least  on  investment  -  of  the  current  EU  negotiation 
position. 

59.  The  financial  implications  also  need  to  be  examined  in  the  light  of  their  impact  on 
economy both at micro-economic and  macro-economic  level which will  inevitably  be 
examined by the various economic operators involved.  The complexity arising from the 
number  of  variables  will  require  innovative  solutions  that  should  be  examined  case  by 
case  with  the  parties  involved.  It  will  be  necessary  to  develop  a  methodology  which 
takes  account  of  this  multi-dimensional  approach  (e.g.  objective -  time  frames -
instrument  - cost), together with  reliable evaluation  and  analysis  tools. Certain  Member 
States are already adopting greenhouse gas emissions  limitation  strategies  backed  up by 
specific  programmes of policies and measures and an evaluation of costs.  It is necessary 
for  all  the  Member  States  and  the  Commission  to  benefit  from  this  experience, 
particularly as regards the evaluation of the financial  implications and the  methodologies 
adopted.  Joint  analyses  work  will  be  a  necessary  tool  for  assessing  better  the 
implications of the decisions taken. 

60.  In the context of the internal  market, a sound joint  analysis  of the  energy  situation  by 
the  Member  States  and  the  Commission  is  also  indispensable  in  order  to  determine 
more clearly the issues and solutions related to climate change.  For a better definition  of 
policies  and  measures,  it  is necessary  first  of  all  to  have  a  better  understanding  of  the 
sectors and actors consuming energy and  producing  greenhouse  gas  emissions.  Through 
its research  programme, the Commission  is developing  the capacity  to evaluate  Policies 
and  Measures  taking  into  account  social,  economic  and  scientific  aspects  of  Climate 
Change (JOULE, Environment and Climate programmes). 

61.  A stronger energy policy, taking account of its impact on climate change, should  be 
backed  up  by  better  co-ordination  of  all  measures  directly  affecting  energy, 
including  those  taken  in  the  context  of  other  sectorial  policies.  The  Union  needs  to 
demonstrate  its ability to adopt  a comprehensive  strategy.  It  also  needs  to involve  the 
economic actors. One of the roles of the Consultative Committee on  Energy  established 
by  Commission  decision  will  be  to  look  to  how  the  Energy  dimension  to  the 
Community's climate change strategy can be reinforced  by the economic actors. 

62.  The  climate  change  challenge  is  by  definition  an  international  one.  In  particular, 
substantial efforts  will need to be undertaken on the part of the Union  and the  associated 
States to ensure that  energy  efficiency  in those  countries  reaches  a  level  comparable  to 
that  observed  in  recent  years  in the  Union.  The  decisions  that  will  be  taken  in  Kyoto 
will  ultimately  have  to  be  applied  to  the  Associated  Countries  which  want  to join  the 
Union. One of the objectives  for the Central  and Eastern  European  Countries  during the 
current  transformation  process  is to  reform  their  energy  sectors.  These  reforms  remain 
their  responsibility.  However,  co-operation  between  the  Union  and  these  countries  has 
been  established  in different  forms  i.e. to promote  energy  saving and  energy  efficiency. 
The  efforts  made  by  the  countries  concerned  are  of  importance  in  view  of  their 
compliance  with  the  acquis  communautaire  in  this  area  ,  i.e.  emission  reductions  of 
greenhouse gases. 

14 

63.  In  the  context  of  the  structured  dialogue  of  3  March  1997,  the  Council  and  the 
Environment  Ministers  of  the  associated  countries  of  Central  and  Eastern  Europe 
stressed the  importance  of close co-operation  between them  and  the  Union,  in  particular 
in  the  context  of  activities  implemented  jointly  and  the  requisite  strengthening  of  the 
mechanisms  to  promote  policies  to  combat  climate  change  and  encourage  energy 
efficiency.  In  this  context,  it  was acknowledged  that  programmes  of  technological  co 
operation  as  INCO-RTD  and  the  JOULE-THERMIE  programme  should  place  greater 
importance on climate change issues, regarding as priority the energy  measures  foreseen 
to respond to the objective of reducing greenhouse gas emissions.  It is also necessary to 
provide  for  greater  support  from  the  EIB,  the  EBRD  and  the  World  Bank.  The 
Community  will  focus  the structured  dialogue  on reinforcing  efforts  to  improve  Energy 
efficiency  and to the adaptation of the Energy system to reduce emissions. 

64.  The Union will also need to insist that our industrialised  parties make a firm commitment 
to  combat  greenhouse  gas  emissions  by  agreeing  to  strong  reduction  objectives  in  the 
future  Kyoto Protocol  since there can be no question  of our European  economy  suffering 
the  consequences  of  an  unilateral  global  environmental  protection  policy  while  our 
trading  partners  could  avoid  measures  influencing  energy  prices  and  hence  the 
competitiveness of industry and employment. 

65.  In the general context of energy relations, the reality of the common challenge in the 
field  of energy  between  OECD and non-OECD  partners  requires a response  which 
specifically  takes  account  of  the  major  impacts  of  energy  supply.  The  Energy 
Charter  Treaty  and  its  protocol  on  energy  efficiency  and  related  environmental  aspects 
could  serve  as  a  joint  basis  for  co-operation.  Equally,  the  implementation  of  the 
Partnership  and  Co-operation  Agreements  with the  majority  of the  countries  of the NIS 
as well  as the execution  of technical  assistance  programmes would  contribute to  energy 
efficiency  and  energy  saving. Energy co-operation  with the developing  countries  should 
also  incorporate  the  dimension  of  climate  change  policies.  To  this  end,  the  3 
March  1997 Council  recognised that the rules governing joint  implementation  should  be 
part of the Kyoto Protocol, even  if initially  it is necessary to await the results of the pilot 
projects  in progress. 

66.  The  initiatives  concerning  co-operation  with  the  Mediterranean  countries  should  also 
as soon as possible, focus  to a large extent  on  energy  projects  and  in particular  projects 
relating to renewable  energy  sources  and  energy  efficiency.  This will  provide  a  lasting 
solution,  enabling 
to  adopt  and  adapt  appropriate 
technologies.  In  addition,  the  Committee  on  Co-operation  between  the  Union  and  the 
Gulf  Co-operation  Council  countries  reiterated  the  two  parties'  interest  in this  issue  on 
16 December  1996.  The  possibilities  as  regards  joint  analysis,  co-operation  and 
exchange of scientific  information  and experience were recognised  as useful  instruments 
in this  area.  Their  deployment  should  now  be  formalised  in the  context  of  appropriate 
programmes. 

in  those  countries 

industry 

67.  The  challenge  of  climate  change  is  such  that  the  development  of  policies  and 
measures  need to be pursued jointly by the Member States and the Community  at 
Community,  national,  regional  and  local  level  in  order  to  achieve  the  agreed 
reduction  targets  and  the  burden-sharing  decided  upon  between  the  Member 
States.  Common  policies  and  measures,  or  policies  and  measures  requiring  co 
ordination  between  Member  States  at  Community  level, are  necessary  and  will  need  to 
be  the  subject  of  an  integrated  approach.  But  in  order  to  develop  this  approach,  the 
questions  outlined  in  the  first  section  of  this  document  (para.  10-14)  need  to  be 
addressed. 

15 

The  Commission  wants  a  strong  political  signal  from  the  European  Parliament  and  the 
Council, with the support of the Economic and  Social  Committee  and the  Committee  of 
the  Regions. It  believes  that the  Community  should  do  all  that  it can  to  ensure  that  the 
Conference of the Parties to the United Nations Convention  on Climate Change  in Kyoto 
in  December  adopt  a  protocol  that  will  reduce  greenhouse  gas  emissions  significantly 
through policies adopted and measures taken by all the Annex X parties. But we must be 
certain  that  the  commitments  can  be  fulfilled,  and  that  the  political  will  and  resources 
required are indeed  forthcoming. 

16 

ANNEX 

Energy related C02  emissions (mill, t C02) in the Pre-Kyoto Scenario: 

Assuming  no  new  policy  initiatives  in  the  Member  States  nor  at  the  Community  level, 
C02  emissions would change in the following way  12: 

M t C 02 

percentage change over 1990 

1990 

1995 

2000 

2005 

2010 

2020 

EUR 

3200 

-2% 

+2% 

+6% 

+8% 

+ 16% 

Energy related C02  emissions by sector (mill, t C02) 

percentage change over  1990 

1990 

626 

743 

654 

1995 

2000 

2005 

2010 

2020 

- 1 0% 

-14% 

-14% 

-15% 

-15% 

+ 9% 

+22% 

+31% 

+39% 

+49% 

- 3 % 

-  1% 

+ 2% 

+ 4% 

+ 6% 

industry 

transport 

domestic/tertiary 

power/heat  production 

1036 

- 5% 

- 2% 

+2% 

+ 2% 

+17% 

energy branch 

141 

+ 7% 

+9% 

+ 1 1% 

+12% 

+13% 

total  emissions 

3200 

- 2% 

+ 2% 

+6% 

+ 8% 

+16% 

12 The EU analysis is based on modelling results with the MIDAS model undertaken by Prof. Capros of 

the National Technical University of Athens, study commissioned by DG XVII, April 1997 

E U:  p r e - K y o to  s c e n a r i o:  d e v e l o p m e nt  of  G D P,  C 02  e m i s s i o n s, 

g r o ss  i n l a nd  c o n s um  p t i o n,  e n e r gy  a nd  c a r b on 

i n t e n s i ty 

2 00 

1990  =  100 

G DP 

e n e r gy  c o n s u m p t i on 
C O 2  em  i s s i o ns 

c a r b on 

i n t e n s i ty 

-» 

e n e r gy 

i n t e n s i ty 

1990 

1995 

2000 

2005 

2010 

2015 

2020 

E U:  p r e - K y o to 

s c e n a r i o: 

t o t al  e n e r gy  c o n s u m p t i on  1 9 90 

-  2 0 20 

I l l u s t r a t i on  of  u n d e r l y i ng  f a c t o rs  f or  CO  2  e m i s s i on 

c h a n ge 

2 5 0C 
2 250' 
2 0CQ 
1 7 50 
15  0 o  4 

10  0 0 

g 

| 

?. 5 0 

0 

j 
X-

energy  intensity  gains 

GDP  growth 

u p w a rd  p r e s s u re 

d o w n w a rd  p r e s s u re  /  b a l a n ce 

E Ur  p r e - K y o to  s c e n a r i o:  p o w e r / h e at  p r o d u c t i on  1 9 90 

-  2 0 20 

I l l u s t r a t i on  of  u n d e r l y i ng 

f a c t o rs  f or  C O:  e m i s s i on  c h a n ge 

1 0 00 

upwsirci  p r e s s u re 

d o w'ii v»'  Ë r d  p r e s s u re  /  b a l a n ce 

ISSN 0254-1475 

COM(97)  196  final 

DOCUMENTS 

EN 

12  14 

Catalogue number  :  CB-CO-97-223-EN-C 

ISBN 92-78-19778-5 

Office  for Official  Publications of the European Communities 

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