Communication from the Commission to the Council, the European Parliament, the European Economic and Social committee and the Committee of the Regions - Winning the Battle Against Global Climate Change {SEC(2005) 180}
Date: 2005-02-09
Institutions: European Commission
Subjects: action programme, climate change, greenhouse gas, innovation, pollution control measures, reduction of gas emissions

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 9.2.2005 
COM(2005) 35 final 

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

Winning the Battle Against Global Climate Change 

{SEC(2005) 180} 

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TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

Introduction .................................................................................................................. 3 

The Climate Challenge................................................................................................. 3 

Benefits and Costs of Limiting Climate Change.......................................................... 4 

The Participation Challenge......................................................................................... 4 

The Innovation Challenge ............................................................................................ 5 

The Adaptation Challenge............................................................................................ 7 

Conclusions .................................................................................................................. 8 

Recommendations for EU Climate Policies: The Next Steps...................................... 9 

Annexes.................................................................................................................................... 12 

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1. 

INTRODUCTION 

With  the  entry  into  force  of  the  Kyoto  Protocol  international  efforts  to  combat 
climate  change  enter  a  new  phase.  The  EU  has  begun  reducing  its  greenhouse  gas 
emissions and now needs to develop its medium and long term strategies for winning 
the  battle  against  climate  change,  inside  the  EU  and  together  with  the  international 
community.  Several  EU  Member  States  have  already  announced  or  proposed 
national  mid-  and  long-term  climate  targets.  This  Communication  responds  to  the 
request  of  the  European  Council  at  its  March  2004  meeting  for  “a  cost  benefit 
analysis  which 
takes  account  both  of  environmental  and  competitiveness 
considerations”,  as  preparation  for  a  discussion  on  “medium  and  longer  term 
emission  reduction  strategies,  including  targets”.  On  the  basis  of  the  analysis 
undertaken by the Commission, it recommends a number of elements which should 
be included in the EU’s future climate change strategies and proposes dialogue with 
key  partners  during  2005  in  order  to  prepare  the  EU’s  position  for  future 
international  negotiations.  It  is  accompanied  by  a  working  document  setting  out  in 
greater  detail  the  review  of  scientific  evidence  and  the  scenarios  which  have  been 
analysed to underpin the information presented here. 

2. 

THE CLIMATE CHALLENGE 

Climate change is happening. Over the 20th century, the global average temperature 
has  risen  by  about  0.6°C,  and  the  mean  temperature  in  Europe  increased  by  more 
than  0.9°C.  Globally,  the  10  warmest  years  on  record  all  occurred  after  1991. 
Greenhouse  gas  concentrations  are  higher  now  than  at  anytime  in  the  past  450 000 
years, and are projected to keep rising. 

The overwhelming scientific consensus is that the cause is emissions of greenhouse 
gases from human activity. Because of lags in the climate system, past emissions will 
lead to an additional rise in the temperature during the 21st century, and emissions, 
are  expected  to  increase  further  in  the  coming  decades.  As  a  consequence,  global 
temperatures are expected to increase by 1.4 to 5.8°C by the year 2100 (compared to 
1990 temperatures) and by 2.0 to 6.3°C in Europe.  

Climate change needs to be slowed down and eventually halted. On the basis of the 
2nd Assessment Report of the Intergovernmental Panel on Climate Change (IPPC) the 
EU  Council  of  Ministers  stated  in  1996  that  it  “believes  that  global  average 
temperatures should not exceed 2 ºC above pre-industrial level”1. The 2°C objective 
needs to be translated technically into policy terms. Often it is presented in terms of 
atmospheric  concentration  of  greenhouse  gases  and  expressed  in  parts  per  million 
(ppmv). Recent research indicates that a level of 550 ppmv (CO2 equivalents) offers 
at most a one in six chance of respecting the 2 ºC target, while if the concentration 
were  to  rise  to  650  ppmv  there  is  a  one  in  sixteen  chance  of  meeting  the  target. 
Consequently,  limiting  the  temperature  rise  to  2  ºC  would  very  probably  require 
greenhouse  gas  concentrations  to  be  stabilised  at  much  lower  levels.  As  the 

1 

1939th Council Meeting, Luxembourg, 25 June 1996. 

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concentration is already over 400 ppmv and is rising at an average rate of 0.5 % per 
year, achieving the 2 ºC target will require significant global cuts in emissions. 

3. 

BENEFITS AND COSTS OF LIMITING CLIMATE CHANGE 

There is increasing scientific evidence that the benefits of limiting the global average 
temperature increase to 2 °C outweigh the  costs of abatement policies (for detailed 
summaries  see  Annexes  1  and  2).  If  temperatures  continue  to  rise  beyond  2  °C  a 
more  rapid  and  unexpected  response  of  the  climate  becomes  more  likely  and 
irreversible  catastrophic  events  may  occur.  The  Commission  has  carried  out  an 
analysis  of  the  costs  and  benefits  (see  staff  working  paper  for  detail)  which  shows 
that the costs of abatement policies and competitiveness effects can be minimized if 
all sectors and greenhouse gases are included, participation in reducing emissions is 
broadened  to  include  all  major  emitting  countries,  emissions  trading  and  project 
based  mechanisms  are  fully  used,  and  if  synergies  with  other  policies  are  fully 
exploited  (e.g.  Lisbon  Strategy,  energy  security  policy,  continuing  reform  of  the 
Common Agricultural Policy, cohesion policy, and air quality policies).  

4. 

THE PARTICIPATION CHALLENGE 

The importance of broadening international participation in efforts to tackle climate 
change  cannot  be  overestimated.  In  the  coming  decades,  the  share  of  EU-25 
emissions in world greenhouse gas emissions is expected to decline to less than 10 
%,  while  those  of  developing  countries  will  expand  to  more  than  half  of  the  total. 
Even  when  considering  historic  and  future  emissions  together,  the  cumulative 
contributions  of  developed  and  developing  countries  are  projected  to  reach  parity 
between 2030 and 2065. 

Figure 1: Projected development of greenhouse gas emissions in different 
regions of the world

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Rest of World

Other annex 1 

EU

1990

2050

Source: Greenhouse gas reduction pathways in the UNFCCC process up to 2025, CNRS/LEPII-EPE, RIVM /M NP, 
ICCS-NTUA, CES-KUL (2003).

Thus,  even  if  the  EU  were  to  cut  its  emissions  by  50  %  by  2050,  atmospheric 
concentrations  would  not be significantly  affected,  unless other  major  emitters also 

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made substantial emission cuts. Therefore, effective action to tackle climate change 
requires  widespread  international  participation  on  the  basis  of  common  but 
differentiated responsibilities and respective capabilities. 

Although  developing  countries  are  more  vulnerable  than  industrialised  countries  to 
the damages of climate change, they are concerned that reducing emissions will harm 
their  economic  development.  However,  the  experience  of  the  new  Member  States 
during the economic recovery in the second half of the 1990’s shows that this needs 
not to be the case. Developing countries will be more likely to adopt climate policies 
if  these  are  designed  to  contribute  to  wider  development  goals.  Moreover,  tackling 
climate  change  also  provides  other  benefits  that  almost  exclusively  accrue  to  those 
countries that undertake the effort. For instance, significant improvements in energy 
efficiency  and  the  introduction  of  low  carbon  energy  sources  are  possible  and  will 
contribute to sustaining rapid growth. The health benefits which come from better air 
quality  could  also  be  a  major  driving  force  for  cutting  emissions.  In  fact,  some 
countries  already  implement  a  number  of  such  policies.  The  recently  adopted  EU 
Action Plan on Climate Change and Development2 will be instrumental in supporting 
developing countries addressing these issues. 

Developing countries could be further encouraged to take part in international efforts 
to reduce emissions. For instance, if companies located in developing countries could 
participate in emissions trading it would open the possibility for them to benefit from 
effective  emission  reductions.  Devising  incentives  for  developing  countries  to  take 
part  in  international  emissions  reductions  may  also  be  a  way  of  achieving  wider 
participation  by  developed  countries.  The  US  has  argued  that  the  absence  from  the 
requirements  of  the  Kyoto  Protocol  of  developing  countries  that  are  by  now  major 
greenhouse gas emitters makes it environmentally ineffective and risks undermining 
the  competitiveness  of  US  industry.  Developing  countries  in  turn  are  reluctant  to 
constrain  their  emissions.  The  EU  should  support  efforts  to  resolve  this  impasse. 
Indeed a relatively small group – EU, US, Canada, Russia, Japan, China and India – 
accounts for about 75 % of world greenhouse gas emissions. It might be worthwhile 
to try to accelerate progress at the global level by discussing reductions among this 
smaller  group  of  major  emitters  in  a  forum  similar  to  the  G8,  in  parallel  with 
vigorous efforts to reach agreement in the UN context.  

5. 

THE INNOVATION CHALLENGE 

The  innovation  challenge  over  the  coming  five  decades  will  be  considerable. 
Substantial  changes  in  how  the  world  produces  and  uses  energy  will  be  required. 
Some of these changes in energy use can be expected to occur in any event. Factors 
such  as  rising  prices  for  fossil  fuels  are  likely  to  lead  to  a  partial  shift  away  from 
fossil  fuels.  Despite  these  developments,  additional  technological  change  in  all 
economic  sectors  will  be  required,  in  addition  to  measures  to  reduce  non-CO2 
greenhouse gases and to maintain or enhance carbon sinks. Achieving this progress 
will require a combination of “push” and “pull” policies. 

2 

Council document 15164/04. 

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Pulling technological change  

The  more  prices  truly  reflect  external  costs  and  the  more  demand  reflects  better 
consumer  climate  awareness,  the  more  investments  in  climate  friendly  technology 
will increase. Establishing a market value for greenhouse gases, for instance through 
emissions  trading  or  taxation,  will  provide  a  financial  incentive  curbing  demand, 
promoting  the  widespread  use  of  such  technologies,  and  encourage  further 
technological  development.  Similarly,  the  abolition  of  environmentally  harmful 
subsidies will help to create a level-playing field between different energy sources. In 
2004,  the  European  Environment  Agency  estimated  annual  energy  subsides  in  the 
EU-15  for  solid  fuels,  oil  and  gas  amounted  to  more  than  €  23.9  billion  and  for 
renewable  energy  to  €  5.3  billion.  International  transport  such  as  aviation  and 
maritime transport are almost entirely excluded from taxation.  

Market-based  instruments  can  be  complemented  with  smart  and  cost-effective 
policies  that  encourage  the  adoption  of  new  technologies  promoting  their  early 
deployment  as  foreseen  in  the  context  of  the  Lisbon  strategy.  They  are  particularly 
suitable  at  an  early  stage  of  commercialisation  by  helping  to  overcome  barriers  to 
their  introduction  and  facilitating  demonstration.  The  European  experience  shows 
that  active  support  policies  have  helped  to  radically  reduce  unit  costs  of  producing 
electricity  from  renewable  energy  sources  in  the  years  1980-1995  (-65  %  for 
photovoltaics,  -82  %  for  wind  power,  -85  %  for  electricity  from  biomass).  Such 
efforts  must  continue  at  accelerated  speed.  In  addition,  policies  should  exploit 
possible co-benefits, for instance in terms of air quality or urban transport policies. 
The actions proposed in the EC Environmental Technology Action Plan can provide 
guidance for national and European action. 

Smart  and  cost  effective  ‘pull’  policies  should  take  advantage  of  normal  capital 
replacement  cycles.  Gradual  transformation  will  require  a  stable,  long  term  policy 
framework. Given the need for the renewal and expansion of the global capital stock 
in the electricity industry in the coming three decades, such a framework needs to be 
established as early as possible. Such opportunities cannot be missed as investments 
in the power sector, industry, transport infrastructure or buildings will determine CO2 
emissions for several decades ahead. In Europe alone around 700 GW of electricity 
generation  (equivalent  to  the  currently  installed  capacity)  needs  to  be  installed 
(investment cost: € 1.2 trillion) by 2030. Planning for these decisions is being done 
some 5 to 10 years ahead and must be based on the necessities of long-term climate 
policies. 

Many technologies to reduce greenhouse gas emissions either exist already or are at 
an  advanced  pilot  stage.  A  recent  study  identified  the  15  most  promising  of  such 
technologies  (see  Annex  3).  Taking  all  15  options  together  this  would  amount  to  a 
reduction potential of more than 54 Gt CO2 eq. per year in 2050. If used to its fullest 
extent, the major part of the projected baseline emissions in 2050 could be avoided. 
Five of those options concern energy efficiency. Thus, one central pillar of any future 
energy  strategy  for  the  EU  must  be  cost  effective  energy  efficiency  improvements 
and  energy  savings.  Action  in  this  field  further  complements  the  Lisbon  strategy, 
strengthens  the  security  of  energy  supply,  and  creates  significant  numbers  of  new 
jobs  in  Europe  and  a  more  competitive  industry  consuming  less  energy.  Estimates 
show that in the EU-15 it would be economically feasible to realise energy savings of 

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up to 15 % over the coming decade, while a technical potential of up to 40 % exists. 
Carbon capture and storage is another important area.  

Pushing technological change: Invest in the knowledge economy  

Future technologies for widespread use in the second half of this century still need to 
be developed. Unfortunately, since the early 1980’s IEA Members have halved their 
energy-related research and technology development budgets. This trend needs to be 
reversed  in  the  EU  if  it  wants  to  improve  its  competitiveness  in  these  markets. 
Therefore,  budgets  for  climate,  energy,  transport  and  production  and  consumption 
research  need  to  be  increased  significantly  in  the  upcoming  7th  Framework 
Programme.  International  co-operation  to  develop  breakthrough  technologies  must 
be enhanced with the help of public-private partnerships. 

Technology innovation: giving Europe a competitive edge in a low carbon future 

In the context of the Lisbon strategy, the Kok report stresses that the EU can gain a 
first  mover  advantage  and  can  create  a  competitive  edge  by  focusing  on  resource-
efficient  climate  friendly  technologies  that  other  countries  will  eventually  need  to 
adopt.  As  an  example,  the  countries  that  have  taken  the  lead  in  promoting  wind 
energy  now  have  95%  of  the  rapidly  growing  wind  turbine  industry.  Looking 
forward,  this  kind  of  phenomenon  could  also  emerge  in  other  countries  and  other 
sectors,  such  as  in  cars  or  aviation.  Competitive  advantages  will  be  enhanced  if 
participation in a future international climate agreement is broadened and deepened.  

6. 

THE ADAPTATION CHALLENGE 

Scientific evidence indicates that even meeting the 2°C target will require significant 
preventive  and  remedial  adaptation  efforts  around  the  globe.  As  yet,  few  Member 
States have examined the need to reduce vulnerability and to increase their resilience 
to the effects of the climate change. 

Adaptation to climate change will require further research to predict the impacts at 
regional level in order to enable local and regional public and private sector actors to 
develop cost-effective adaptation options. Particularly vulnerable to climatic changes 
are  low-lying  areas  close  to  the  coast  and  in  river  catchments,  mountainous  areas, 
and areas with high risks of increasing numbers of storms and hurricanes. 

Economic  sectors  dependent  on  weather  like  agriculture,  fisheries,  forestry  and 
tourism are more at risk than other sectors, and thus have a greater need to adapt to 
climate change. In this context, developing countries are the most vulnerable given 
their  high  dependence  on  these  climate-sensitive  economic  sectors  and  their  low 
capacity  to  adapt.  Strengthening  their  adaptive  capacity  would  contribute  to  their 
development. 

Another important aspect of adaptation is the early prediction of more frequent and 
more  damaging  natural  disasters.  The  Commission  is  already  involved  in  an  EU-
wide early warning system for floods and forest fires. This will improve responses to 
natural  disasters  and  assist  in  preventing  damage.  Earth  observation  can  provide 
reliable  tools  for  both  prevention  and  adaptation.  Private  insurance  might  not 

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adequately cover damages and losses of private  property or might  even  be reduced 
over  time.  Governments  will  have  to  step  in,  either  by  requiring  the  provision  of 
adequate coverage or providing solidarity funding. 

7. 

CONCLUSIONS 

Climate change is happening. Science tells us that we should be aiming to limit the 
future global average temperature increase to 2°C above pre-industrial levels in order 
to limit the damage. The 2°C target implies that policies are needed both to adapt to 
climate  change  and  to  mitigate  climate  change.  Despite  the  implementation  of 
already  agreed  policies,  global  emissions  are  likely  to  grow  within  the  next  two 
decades  and  global  reductions  of  at  least  15  %  in  emission  by  2050  compared  to 
1990 levels would seem to be necessary, and will take significant effort.  

Doing nothing is not a sensible option. The more action is postponed, the greater the 
risk  of  irreversible  climate  change,  as  options  to  stabilise  greenhouse  gas 
concentrations  at  lower  levels  are  closed  off.  The  science  of  climate  change 
continues to develop and future evidence may show that change is taking place even 
faster  than  is  apparent  today.  Therefore,  a  rational  medium-  and  long-term  climate 
policy should be based on a ‘keeping the door open’ strategy. Such a strategy would 
allow moving even to a lower than initially targeted concentration level in future, if 
new scientific knowledge points to the necessity to do so. 

Mitigation involves significant adjustments to our societies and economies, such as 
the restructuring of energy and transport systems. It is therefore imperative to use the 
most  efficient  and  least-cost  mix  of  adaptation  and  mitigation  actions  over  time  to 
meet our environmental objectives while maintaining our economic competitiveness. 
The  future  climate  change  strategy  of  the  EU  needs  to  include  the  following 
elements: 

(1) 

The broadening of participation: The EU will continue to play a leadership 
role in the multilateral approach to climate change, but wider participation on 
the  basis  of  common  but  differentiated  responsibilities  is  urgently  required. 
Realistic  progress  towards  the  2°C  target  is  only  within  reach  if  more 
countries  in  the  world  take  effective  actions.  In  order  to  minimise  negative 
economic impacts further policy efforts by the EU need to be accompanied by 
similar  action  of  other  major  emitting  nations.  Moreover,  policies  to  tackle 
climate  change  must  be  consistent  with  and  contribute  towards  other 
important  objectives  (e.g.  poverty  reduction),  accommodating  the  rather 
emitters. 
diverse 

future  major 

conditions 

current 

and 

of 

The  EU  negotiating  strategy  should  include  an  international  process  of 
negotiated  actions  to  reduce  emissions,  with  the  aim  of  involving  and 
committing all large emitters. These actions could consist of specific projects 
or  programmes  to  improve  energy  efficiency  or  to  promote  low-carbon 
technologies as well as more comprehensive policies, including targets. 

(2) 

The inclusion of more policy areas: The scope of international action must 
be widened to cover all greenhouse gases and sectors. In particular, the fast 
growing emissions from aviation and maritime transport should be included. 

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(3) 

(4) 

A fresh look will have to be taken at how to halt deforestation of the world’s 
forests.  Addressing  this  problem  as  a  specific  issue  in  some  regions  is 
necessary  as  almost  20  %  of  global  greenhouse  gas  emissions  are  currently 
emitted due to land use changes. 

Enhanced  innovation:  The required transformation of energy and transport 
systems  presents  a  major  innovation  challenge.  Within  the  context  of  the 
Lisbon strategy, a technology policy employing an optimal mix of ‘push’ and 
‘pull’  policy  instruments  should  be  developed  to  underpin  the  restructuring 
process. Placing an emphasis on cost-effective emission abatement would be 
essential.  A  portfolio  of  low  emission  technologies  is  already  available  and 
needs to be disseminated more widely. More research is needed to bring new 
technologies closer to the market. 

The  continued  use  of  market  based  and  flexible  instruments:  Successful 
structural  elements  of  the  Kyoto  Protocol  should  be  maintained  in  any  new 
system  post  2012.  These  include  emissions  trading,  as  introduced  by  the 
European  Union,  on  the  basis  of  emission  limitations  and  project  based 
mechanisms  as  building  blocks  to  a  truly  international  carbon  market,  the 
rules  for  monitoring  and  reporting  on  emissions,  and  a  multi-lateral 
regime. 
compliance 

While continuing to promote the concept of targets and timetables, the scope 
of  international  negotiations  has  to  be  broadened  so  as  to  concretely  link 
climate change issues with research, development, deployment and diffusion 
of new technologies, improving energy efficiency and developing low-carbon 
sources of energy and development policy. This broadening of the scope for 
negotiation  has  to  be  understood  as  a  way  of  creating  incentives  and 
motivation for more countries to participate in actions against climate change. 

Developing  countries  will  make  huge  investments  into  their  energy 
infrastructure  over  the  coming  decades.  Public  funds  that  are  channelled  by 
the World Bank, EIB, EBRD and other development banks need to be used to 
leverage  developing  countries’  own  savings 
towards  climate-friendly 
investments, particularly in the energy sector. The potential of a global low-
carbon  energy  programme  and  technology  transfer  and  diffusion  funds 
focusing on major emerging economies needs to be explored. 

(5) 

The inclusion of adaptation policies: More resources need to be allocated in 
the  EU  to  adapt  effectively  to  climate  change.  The  adaptation  efforts  of  the 
poorest and worst-affected countries should be financially supported. 

8. 

RECOMMENDATIONS FOR EU CLIMATE POLICIES: THE NEXT STEPS 

The  European  Council  intends  to  discuss  “medium  and  longer  term  emission 
reductions strategies” at its next meeting. This discussion will lay the foundations for 
future EU climate change policy and will shape the way in which the Union engages 
with  its  international  partners.  In  the  light  of  the  analysis  and  the  conclusions 
contained in this Communication and in the accompanying staff working paper, the 
Commission  has  identified  a  number  of  elements  which,  in  its  view,  should  be 

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included in the EU’s future climate change strategy. The Commission recommends 
that  the  European  Council  endorse  the  following  approach  on  which  to  base  the 
development of the Union’s climate change policy: 

•  Immediate  and  effective  implementation  of  agreed  policies:  the  EU  has 
succeeded in reducing its emissions by 3% below the 1990 level, but much more 
needs to be done to reach the 8% emission reduction targets agreed in the Kyoto 
Protocol. Measures identified in the Green Paper on the security of energy supply 
and  the  White  Paper  on  Transport  Policy  such  as  infrastructure  charging,  the 
revision  of  the  Eurovignette  Directive  and  measures  encouraging  a  modal 
rebalancing  towards  rail  and  waterborne  transport,  such  as  those  included  in  the 
Transeuropean  Transport  Network  policy,  need  to  be  fully  implemented.  The 
removal  of  bottlenecks  preventing  the  deployment  of  existing  or  promising  new 
technologies  and  new  initiatives  (e.g.  the  assessment  of  the  potential  of  an  EU 
market  for  green  certificates,  the  swift  implementation  of  Environmental 
Technology  Action  Plan)  should  also  be  pursued.  A  key  element  will  be 
strengthened  support  for  investment  in  climate-friendly  technologies  under 
different headings in the new Community budget for the period 2007 to 2013. In 
addition, a major new effort throughout Europe is necessary to make real progress 
in energy efficiency: a new European-wide Energy Efficiency Initiative. 

•  Increased public awareness should be fostered through a strategic programme to 
sensitise the general public to the climate change significance of their actions, i.a 
through the launching of an EU-wide awareness campaign. 

•  More  and  better  focussed  research  should  be  directed  to  further  improving 
knowledge  on  climate  change,  including  the  links  to  ocean  processes,  to 
addressing global and regional impacts, developing cost-effective adaptation and 
mitigation  strategies,  including  non  CO2  gases.  This  could  be  done  through  a 
significant  increase  in  EU  spending  under  the  7th  Framework  Programme  for 
climate-friendly technology research and development, in particular in the energy 
and transport sectors, but also in agriculture and industry. 

•  Stronger  co-operation  with  third  countries  could  be  promoted  through  a 
strategic programme for enhanced technology transfer (incl. technology diffusion 
funds) and scientific R&D cooperation on low greenhouse gas technologies in the 
field of energy, transport, industry and agriculture. Climate friendly development 
policies  should  be  drawn  up  in  co-operation  with  developing  countries,  in 
particular  in  the  areas  of  energy  and  air  quality.  In  implementing  these 
recommendations, coherence between the internal and external dimension  of the 
EU  climate  change  policies  needs  to  be  ensured.  For  instance,  the  European 
Neighbourhood Policy could emphasise early transposition and implementation of 
the climate related ‘acquis’ promoting convergence with the EU’s climate policy. 
The  same  approach  should  be  followed  in  the  pre-accession  strategies. 
Strengthening  the  adaptive  capacity,  particularly  of  the  most  vulnerable 
developing countries, should become an integral part of development assistance. 

•  A  new  phase  of  the  European  Climate  Change  Programme  in  2005:  The 
Commission  will  review  progress  and  explore  new  actions  to  systematically 
exploit  cost  effective  emission  reduction  options  in  synergy  with  the  Lisbon 

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strategy.  Attention  will  be  paid  in  particular  to  energy  efficiency,  renewable 
energy,  the  transport  sector  (including  aviation  and  maritime  transport),  and 
carbon  capture  and  storage.  The  role  of  the  EU  in  reducing  vulnerability  and 
promoting  adaptation  should  be  explored  with  the  involvement  of  the  EU 
insurance industry. 

In  building  support  for  further  multilateral  action  against  climate  change  the  EU 
should  engage  in  real  dialogue  with  its  international  partners.  The  Commission 
recommends that the EU explore options for a post-2012 strategy with key partners 
during 2005 before deciding on the position it will take in the upcoming negotiations. 
In  bilateral  contacts  with  interested  countries,  including  the  large  emitters,  actions 
should  be  identified  that  they  are  ready  to  take  within  specified  time  horizons  and 
conditions. In this way, the EU should use its international leadership role on climate 
change to pursue an action oriented approach at the international level. 

The  outcomes  of  bilateral  discussions  could  then  be  fed  into  the  UNFCCC 
negotiations,  through  commitments  to  act  or  to  meet  targets.  The  objective  is  to 
establish  a  multilateral  climate  change  regime  post-2012  with  meaningful 
participation of all developed countries and the participation of developing countries 
which will limit the global temperature increase to 2 °C, and which is considered as a 
fair  sharing  of  effort  by  all  key  players.  The  reduction  commitments  that  the  EU 
would be willing to take under such a regime should depend on the level and type of 
participation  of  other  major  emitters.  Therefore, 
is  not 
recommending the adoption of a specific EU target at this stage. 

the  Commission 

Drawing  on  the  analysis  and  ideas  set  out  in  this  Communication,  the  EU  should 
make  clear  its  continuing  commitment  to  winning  the  battle  against  global  climate 
change  and  to  honouring  its  existing  commitments.  The  EU  should  show  its 
determination  to  take  on  deeper  and  longer  term  reductions  in  its  greenhouse  gas 
emissions in the context of an international agreement on a future strategy post-2012 
which will deliver global reductions commensurate with the 2°C target. Depending 
on the outcome of international consultations during 2005 the Commission will make 
further proposals to the Council to develop the EU’s negotiating strategy for the next 
round of global climate change negotiations. 

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ANNEXES 

Annex 1: Effects of Continuing Climate Change 

Sea level rise: By 2100, sea levels rise of 0.09 to 0.88 m, with a central value of 0.48 m, is predicted to occur. 
Sea  level  rise  will  cause  flooding,  coastal  erosion  and  the  loss  of  flat  coastal  regions.  Coastal  protection  is 
possible, though this leads to adaptation costs. Rising sea level increases the likelihood of storm surges, enforces 
landward  intrusion  of  salt  water  and  endangers  coastal  ecosystems  and  wetlands.  Estimates  in  the  European 
Union, where the coastline is about 89,000 km long, indicate some 68 million people could be affected by sea 
level changes.  

At a global level, the effect is potentially more extreme. Populations that inhabit small islands and/or low-lying 
coastal areas (e.g. small island states such as the Maldives, the Bangladesh delta) are at particular risk of severe 
social and economic effects from sea-level rise and storm surges. The loss of these areas (e.g. for those living on 
small  island  states)  will  have  potentially  important  secondary  effects  through  migration  and  potential  socially 
contingent effects. 

Agriculture: Parts of Europe, particularly in mid and northern Europe, are expected to potentially benefit from 
increasing CO2 concentrations and rising temperatures. The cultivated area could be expanded northwards, and 
growing seasons extended. In southern parts of Europe, agriculture may be threatened by climate change due to 
increased water stress. During the heat wave in 2003, many southern European countries suffered drops in yield 
of up to 30%, while some northern European countries profited from higher temperatures and lower rainfall. Bad 
harvests could become more common due to an increase in the frequency of extreme weather events (droughts, 
floods, storms, hail), and pests and diseases. 

Global projections estimate EU agricultural yield increases for up to 2°C temperature rise, but a decline beyond 
this  level.  But  in  subtropics/tropics  damages,  increased  heat  stress  is  already  projected  for  1.7°C  temperature 
increase. Higher  average  temperatures of 2.5°C  in 2080  could  result  in 50  million  additional  people at  risk  of 
hunger. 

Energy: Energy use is likely to change with new average temperatures ranges, with a combination of increases 
and  decreases  in  demand  for  heating  (both  in  terms  of  overall  energy  supplied,  and  to  meet  peak  demands). 
Benefits from increased winter temperatures that reduce heating needs may be offset by increases in demand for 
summer air conditioning, as average summer temperatures increase. 

Health - thermal stress: More than 20,000 additional deaths attributable to heat, particularly among the aged 
population, occurred in western and southern Europe during the summer of 2003. Heat waves are projected to 
become more frequent and more intense during the twenty-first century and hence the number of excess deaths 
due  to  heat  is  projected  to  increase  in  the  future.  However,  rising  temperatures  will  lead  to  reduce  deaths  in 
winter. Globally it is estimated that an average temperature rise above 1.2°C will cause an increase in premature 
mortality by several hundred thousands without accounting for extreme event like heat waves.  

Health - infectious disease: In Europe tick-borne encephalitis cases increased in the Baltic region and central 
Europe between 1980 and 1995, and have remained high. Ticks can transmit a variety of diseases, such as tick-
borne encephalitis (TBE) and Lyme disease (in Europe called Lyme borreliosis). It is not clear how many of the 
85,000 cases of Lyme borreliosis reported annually in Europe are due to the temperature increase over the past 
decades. At  a global  level,  the rising  temperatures will  bring  many  additional  people at  risk  of  suffering  from 
diseases like Malaria, dengue and schistosomiasis. For instance it is projected that 2°C increased will result in 
210 million people more at risk of malaria and an epidemic potential increase of 30 to 50 % for dengue. 

Ecosystems: Significant impacts on ecosystems and water resources are likely between 1 and 2°C, and the risks 
of net negative impacts on global food production occur between 2 to 3°C global warming. Recent studies1 for 
instance indicate that a rise of up to 1°C above pre-industrial levels up to 10 % of ecosystem areas worldwide 
will shift. Some forest ecosystems will exhibit increased net primary productivity, increased fire frequency and 
pest  outbreaks.  Some  hotspots  with  high  biodiversity  and  protected  areas  of  global  importance  will  begin  to 
suffer  first  climate-change  induced  losses.  Coral  reefs  will  suffer  increased  bleaching.  Range  shifts  of  species 
and higher risk for some endangered species are likely. Most of these impacts can already be observed today. 

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An increase of 1 to 2°C above pre-industrial levels will shift up to 15 to 20 % of ecosystem areas worldwide. 
Some  protected  areas  of  global  importance  and  hotspots  are  likely  to  suffer  severe  losses  of  both  area  and 
species. Wildlife of arctic ecosystems will be harmed (e.g. polar bear, walrus). Bleaching events will likely be so 
frequent that coral reef recovery is insufficient to prevent severe losses of biodiversity. 

Increase  of  more  than  2°C  above  pre-industrial  levels:  The  global  share of  ecosystems  shifting  due  to  climate 
change  will  likely  be  above  20  %,  and  much  more  in  some  regions.  Global  losses  of  coastal  wetlands  may 
exceed  10  %.  At  a  global  scale,  reefs  will  undergo  major  disruptions  and  species  loss,  but  will  possibly  not 
disappear completely. A large number of species will be endangered by range shifts. There is a risk that some 
protected areas of global importance will lose most of their area due to climate change.  

Water resources, water supply and water quality: Above 2 to 2.5°C global average temperature increase it is 
projected that additional 2.4 to 3.1 billion people will be at risk of water stress.  

Floods: Between 1975 and 2001, 238 flood events were recorded in Europe. Over this period the annual number 
of  flood  events  clearly  increased.  The  number  of  people  affected  by  floods  rose  significantly,  with  adverse 
physical  and  psychological  human  health  consequences1.  With  2.0  to  6.4°C  temperature  increase  the  damage 
from  riverine  floods  will  be  several  times  higher  than  in  the  no  climate  change  case.  With  1.4°C  temperature 
increase coastal floods are projected to increase the number of people at risk by 10 million, 3.2°C will bring 80 
million at risk. 

Impacts from storm damage and extreme weather: Extreme weather events are also likely to increase, with 
cold spells, heat waves, drought, floods, storms and tropical cyclones. Changes in both frequency and severity 
are possible, though these may not be linearly dependent on average climate. In Europe, 64 % of all catastrophic 
events since 1980 are directly attributable to weather extremes: floods, storms and droughts / heat waves. 79% of 
economic  losses  caused  by  catastrophic  events  result  from  these  weather  related  events.  Economic  losses 
resulting from weather related events have increased significantly in the last 20 years, from an annual average of 
less than US$ 5 billion to about US$ 11 billion. This is due to wealth increase and more frequent events. Four 
out  of  the  five  years  with  the  largest  economic  losses  in  this  period  have  occurred  since  1997.  The  average 
number  of  annual  disastrous  weather  related  events  in  Europe  doubled  over  the  1990s  compared  with  the 
previous decade, while non-climatic events such as earthquakes remained stable. Projections show an increasing 
likelihood of extreme weather events. Thus, growing damages are likely. 

Regional  conflicts,  famines,  large  scale  migration:  There  is  an  emerging  consensus  that  widespread  climate 
change  may  increase  socially  contingent  effects1,  due  to  multiple  stresses  coming  together.  This  is  unlikely  to 
affect  Europeans  directly,  but  may  well  have  effects  on  Europe.  The  combination  of  stresses  from  climate 
change from the above effects may converge on a number of vulnerable areas, for example in Africa, leading to 
potential regional conflict, poverty or famine, migration, etc.  

It is highlighted that the disproportionate impact of climate change occurs on developing countries because these 
countries are more vulnerable to climate change than developed countries: their economies rely more heavily on 
climate-sensitive  activities;  they  are  close  to  environmental  tolerance  limits;  and  they  are  poorly  prepared  to 
adapt to climate change. In contrast, richer societies tend to be better able to adapt and their economies are less 
dependent  on  climate.  With  the  upper  range  of  IPCC  projections  of  climate  change,  the  impacts  are  likely  to 
adversely affect achievement of the Millennium Development Goals (as agreed at the UN Millennium Summit in 
New York in 2000).  

Abrupt  climate  change:  There  are  also  a  number  of  major  effects  (potentially  catastrophic  effects  or  major 
climate  discontinuities)  that  could  occur.  These  include  climate  feedbacks  that  strongly  accelerate  climate 
change  by  exceeding  specific  temperature  thresholds,  irreversible  changes  to  the  climate  system,  or  result  in 
sudden  and  rapid  exacerbation  of  certain  impacts  requiring  unachievable  rates  of  adaptation.  The  temperature 
changes at which these thresholds would be passed are not all clearly defined as yet, due to uncertainties in the 
science. At temperature rise above 2°C there is an increase in the risk of a range of severe large scale events, 
such as shutdown of the ocean thermohaline circulation, but some thresholds may be passed at global average 
temperature changes below 2°C, such as the irreversible melting of the Greenland Ice sheet leading to a sea-level 
rise of 0.3 meter per century (to a maximum of 7 meters) at a sustained local warming of 3°C (Arctic warming). 

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Annex 2: The Benefits and Costs of Limiting Climate Change 

The benefits 

Reducing greenhouse gas emissions generates benefits in the form of avoided damages from 
climate  change.  The  potential  benefits  depend  to  a  large  degree  on  estimates  of  (i)  the 
availability  and  costs  of  adaptation  technologies  and  policies,  and  (ii)  the  sensitivity  of  the 
climate  to  rising  concentrations  of  greenhouse  gases  in  the  atmosphere.  According  to  the 
Intergovernmental  Panel  on  Climate  Change  “comprehensive,  quantitative  estimates  of  the 
benefits of stabilization at various levels of atmospheric concentrations of greenhouse gases 
do not yet exist.” 

Allowing  for  scientific  and  economic  uncertainties,  the  IPCC  Second  Assessment  Report3 
concluded that a 2.5°C rise in global temperature could cost as much as 1.5 to 2.0 % of global 
GDP  in  terms  of  future  damage,  with  significant  regional  variations4.  Indeed,  the  economic 
consequences  of  climate  change  can  already  be  seen  today.  Over  the  past  20  years  the 
insurance sector has seen more than a doubling of economic losses (measured in real terms), 
partly resulting from weather and climate-related events, though other factors such as land use 
changes increasing pressure on coastal areas and flood plains, and more widespread insurance 
coverage,  have  also  contributed  to  this  increase.  Climate  change  is  hitting  poor  developing 
countries hardest as they are most vulnerable and have the least economic means to respond to 
the negative impacts. 

Many  different  effects  of  climate  change  have  been  studied  in  detail  in  recent  years,  and 
demonstrate  that  if  climate  change  is  not  tackled  economic  damage  will  further  increase  as 
will  the  risk  of  irreversible  damage.  Impacts  include  sea  level  rise,  pressure  on  freshwater 
resources,  water  supply  and  water  quality,  agriculture,  energy  use,  human  health  as  well  as 
loss of productivity and bio-diversity and the increased likelihood of drought, flooding, storm 
damage and more extreme weather events. In the long run, as temperatures continue to rise, a 
more  rapid  or  unexpected  response  of  the  climate  becomes  more  likely  or  irreversible 
“catastrophic”  events  such  as  the  shutdown  of  the  Gulf  Stream  or  the  collapse  of  West-
Antarctic Ice Sheet may occur. 

Not  all  regions  and  locations,  and  not  all  economic  sectors  within  the  European  Union  or 
around the world will be equally affected. For instance, the Mediterranean region will suffer 
most from ever greater pressure on water resources. Agriculture and forestry will be adversely 
affected  by  changes  in  weather  patterns  as  will  hydro-electricity  production.  As  a 
consequence,  considerable  impacts  on  the  competitiveness  of  different  economic  sectors  in 
different regions can be expected. 

Avoiding climate change offers also co-benefits that may amount to a substantial proportion 
of  mitigation  costs.  These  co-benefits  are  significant  and  lead  to  lower  emissions  of  other 
pollutants, lower pollution control costs and lower environmental impacts. 

For  example,  a  scenario  with  15  %  CO2  reduction  in  the  EU  power  sector  compared  to 
‘business-as-usual” found considerable side-impacts on the emissions of the conventional air 

3 
4 

Working Group III report, chapter 6. 
A  significant  part  of  the  costs  incurred  represent  reconstruction  and  repair  activities  or  delocalisation 
activities because of the negative effects of climate change. 

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pollutants due to lower consumption of fossil fuels, namely a reduction of the sulphur dioxide 
emissions  by  6%  (equivalent  to  the  total  SO2  emissions  of  Italy),  a  decline  in  nitrous  oxide 
emissions (NOx) emissions by around 1.2 % (comparable to the total emissions of Hungary), 
and a decline in primary emissions of particle matters smaller than 2.5 micrometers (PM2.5) 
by 37kt (approximately three times the total emissions of Denmark). 

The costs 

Estimates of the costs of climate change policies (excluding adaptation efforts) also need to be 
treated with considerable caution. Whilst the benefits from avoidance of climate change are 
potentially  high,  mitigation  involves  significant  adjustment  of  our  societies  and  economies, 
such as the restructuring of energy and transport systems. It is therefore essential to find and 
use  the  most  efficient  and  least-cost  mix  of  adaptation  and  mitigation  actions  over  time  in 
order to ensure that climate change mitigation and the Lisbon objective of increasing the EU’s 
economic growth rate are coherent with each other.  

The  IPCC  considered  the  costs  of  meeting  various  targets  for  atmospheric  concentrations 
under  various  assumptions  about  GDP  and  emissions  growth,  and  based  on  conservative 
assumptions as regards technological progress with respect to abatement technologies. They 
found that, on average, over the period 1990 to 2100, world GDP growth would be slowed by 
0.003% per year; the maximum reduction (to reach a very ambitious target in a high growth 
scenario) was 0.06% per year5. 

The  Commission  has  also  studied  the  possible  costs  of  cutting  world  emissions  consistent 
with  stabilising  greenhouse  gas  concentrations  in  the  atmosphere  at  550  ppmv  in  the  long-
term.  Assuming  gradual  participation  of  all  countries  in  an  international  effort  to  address 
climate change and full international emissions trading, the study shows that reducing EU-25 
emissions annually by about 1.5 percentage points after 2012 would reduce GDP in 2025 by 
about 0.5% below the level it would reach in the absence of such a pro-active climate policy. 
Widespread international participation in lowering the cost of emission reductions is shown to 
be crucial. If the EU were to unilaterally reduce its emissions by a similar amount while the 
rest of the world did nothing, the costs could rise by a factor of three or more without the use 
of the flexible mechanisms of the Kyoto Protocol, with positive environmental effects being 
negligible. 

Alternatively,  according  to  the  Commission’s  analysis,  a  somewhat  less  ambitious  climate 
policy,  aiming  at  stabilising  greenhouse  gas  concentrations  at  650  ppmv,  would  come  at 
abatement costs which would amount to only a quarter of the amount to be invested under the 
first scenario. However, such a policy could, according to this study, lead to global warming 
about  25  %  above  the  level  achieved  in  the  first  scenario,  leading  to  additional  costs  of 
climate  change.  Given  the  huge  risk  of  non-linear  responses  of  the  climate  to  higher 
greenhouse gas concentrations such a policy is unlikely to be consistent with limiting global 
average temperature increase to 2 °C above pre-industrial levels.  

The studies show that the choice of adjustment path is also crucial. Mitigation costs increase 
more  than  proportionally  with  the  speed  of  adjustment,  owing  to  investment  cycles  and  the 
relatively long term payback from technology policies. For the EU-25, the costs in terms of 
GDP vary from 0.2 to 0.5% of GDP by 2025 depending on the adjustment path chosen in the 

5 

IPCC Working Group 3 report “Climate Change 2001: Mitigation”, technical summary, p. 61. 

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short-term.  In  particular,  account  needs  to  be  taken  of  the  scope  for  technology  policies  to 
encourage the development and deployment of promising technologies that may emerge from 
2030  onwards.  International  co-operation  on  technology  should  therefore  become  a 
complement  to  current  policies  even  if  one  knows  that  technologies  might  not  emerge  as 
anticipated. Deeper cuts over shorter periods of time might not be compatible with long term 
investment cycles of costly infrastructure.  

Commission  studies  show  that  the  global  costs  of  mitigation  can  be  minimised  under  the 
following conditions:  

•  the inclusion of all sectors and greenhouse gases (especially non-CO2 gases, bunker fuels, 

deforestation). 

•  the participation of all major emitting countries in an international effort to address climate 

change. 

•  the  full  and  unrestricted  use  of  emissions  trading  and  the  optimal  use  of  other  flexible 
measures,  such  as  the  Clean  Development  Mechanism.  Such  schemes  supplement 
emissions trading by allowing access to lower cost abatement opportunities. Commission 
estimates suggest that such schemes can reduce direct abatement costs by as much as two-
thirds. 

•  the full exploitation of synergies with other important EU policy objectives, in particular 
the Lisbon strategy,  the  energy  security policy, the sustainable development  strategy, the 
continuing  reform  of  the  Common  Agricultural  Policy,  and  the  thematic  strategy  on  air 
quality. 

Sectoral impacts 

The overall effects of mitigation policies on GDP conceal large differences between sectors, 
and within sectors. For example, while fossil fuel-based energy industries may be expected to 
face  higher  compliance  costs,  increased  demand  for  energy  from  renewable  sources 
(including  energy  crops  in  agriculture)  and  for  electricity  generated  by  nuclear  energy  is 
likely. Energy-intensive sectors (chemicals, iron and steel, building materials) will face higher 
compliance  costs,  while  producers  of  abatement  equipment  (energy-saving  technologies, 
carbon storage) will benefit in relative terms. This shift in the structure of the economy will 
require  significant  reallocation  of  capital  and  labour  between  sectors,  while  the  presence  of 
emissions trading will keep compliance costs as low as possible. 

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Annex 3: Fifteen Technology Options - each potentially reducing emissions by 3.6 Gt 
CO2 per year by 2050 

Efficiency and conservation 

(1) 

Improved fuel economy of vehicles 

(2) 

Reduced reliance on cars 

(3)  More efficient buildings 

(4) 

Improved power plant efficiency 

Decarbonization of Electricity and Fuels 

(5) 

Substituting natural gas for coal 

(6) 

Storage of carbon captured in power plants 

(7) 

Storage of carbon captured in hydrogen plants 

(8) 

Storage of carbon captured in synthetic fuel plants 

(9) 

Nuclear fission 

(10)  Wind electricity 

(11)  Photovoltaic electricity 

(12)  Renewable hydrogen 

(13)  Biofuels 

Natural sinks 

(14)  Forest management 

(15)  Agricultural soils management 

Source: Pacala, S, Socolow, R. 2004. Science Vol. 305. 968-972 

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