Europe: Climate Policy

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Europe: Climate Policy

Introduction

The 48 countries of Europe, although they occupy only 2% of the world's land area and contain only 11% of its population, are economically, politically, and culturally influential. Although Europe contains poor countries, it is one of the world's wealthiest and most technologically advanced regions, producing almost a third of global gross domestic product. It is also responsible for 15% of global greenhouse emissions. Eighty percent of its emissions are from its energy and transport sectors. Per person, Europe emits about half as much greenhouse gases as does the United States.

Many European countries are united under the banner of the European Union (EU), though individual countries retain full sovereignty. The climate policy of Europe is formed at several levels. First, individual nations produce their own internal climate policies. Second, climate policy is formed at the level of the EU. Third, nations are individually committed to global-scale climate efforts such as the United Nations Environment Programme (UNEP), the United Nations Framework Convention on Climate Change (UNFCCC, 1992), and the Kyoto Protocol (1997), which is an elaboration and extension of the UNFCCC. The UNFCCC and Kyoto are the basic legal framework of the EU's climate policies.

Since its formation in 1993, the EU has consistently accepted the reality of climate change and argued for action to reduce the situation through binding caps on greenhouse emissions. As of 2007, results of the EU's various climate efforts had been mixed, with some European countries' greenhouse-gas emissions increasing and others decreasing since 1990 (the year most often used for comparison). Europe continues to revise and adjust its climate policy, with negotiations for a 2012 treaty to succeed Kyoto beginning in late 2007.

This article discusses climate policy at the level of the EU, not at the level of individual countries.

Historical Background and Scientific Foundations

The European Union, with 27 member states as of late 2007, was legally established by the Maastricht Treaty of 1993, which revised the pre-existing structure of the European Economic Community (formed 1957). It is concerned primarily with economic affairs, and does not set a united European foreign or military policy as does the federal government of the United States. The executive branch of the EU is the European Commission, headquartered in Brussels, Belgium.

In 1990, in response to the first Assessment Report on climate change issued by the United Nations' Inter-governmental Panel on Climate Change (IPCC), the EU committed to stabilizing its overall emissions of carbon dioxide (CO₂), the most important greenhouse gas, at 1990 levels by 2002. This goal was achieved. The European Commission's first climate initiative was in 1991 (while it was still the executive of the European Economic Community, not yet the EU), a directive to reduce emissions of CO₂ through renewable energy and voluntary commitments by auto manufacturers.

In 1992, all of the member states of the EU, along with the United States and almost all other countries, signed the UNFCCC, a nonbinding treaty acknowledging the reality of climate change and the need to reduce emissions of greenhouse gases. The UNFCCC named no specific goals, but called for further international negotiation to determine such goals. These negotiations produced the Kyoto Protocol in 1997, an extension of (protocol to) the UNFCCC. The protocol specified binding caps or upper limits on greenhouse-gas emissions from developed (industrialized) countries. The countries of the EU, for example—more specifically, the 15 countries that were EU members before 2004— are committed under Kyoto to reduce their greenhouse-gas emissions to 8% below 1990 levels by 2012. The goal was to stabilize global warming at a low enough level to avoid dangerous climate change. Under the terms of the UNFCCC, the Kyoto Protocol is defined as a first step, not a finished product.

At the time of Kyoto, a historic division in climate policy occurred, with Europe affirming Kyoto and the United States—the world's largest national economy and at that time the world's largest emitter of greenhouse gases—refusing to do so. The United States declined to ratify Kyoto asserting that it unfairly allowed rapidly developing countries such as China to increase their emissions without restriction, which would put Kyoto-capped countries at an economic disadvantage. Over a decade later, the divide between U.S. and European climate policy continues, with the U.S. government continuing to oppose Kyoto's central principle of action, binding emissions caps.

In 2000, the European Commission set up the first European Climate Change Programme (ECCP), a consultative body tasked with pulling together expert knowledge on possible actions and policies relating to the mitigation of climate change (that is, reducing the severity of its consequences). EU climate change policy has been based on the recommendations of the ECCP since its formation.

WORDS TO KNOW

CAP AND TRADE: The practice, in pollution-control or climate-mitigation schemes, of mandating an upper limit or cap for the total amount of some substance to be emitted (e.g., CO₂) and then assigning allowances or credits to polluters that correspond to fixed shares of the total amount. These allowances or credits can then be bought and sold by polluters, in theory allowing emission cuts to be bought where they are most economically rational.

CARBON CREDIT: A unit of permission or value, similar to a monetary unit (e.g., dollar, euro, yen) that entitles its owner to emit one metric ton of carbon dioxide into the atmosphere.

CARBON TAX: Mandatory fee charged for the emission of a given quantity of CO₂ or some other greenhouse gas. Under a carbon taxation scheme, polluters who emit greenhouse gases must pay costs that are directly proportional to their emissions. The purpose of a carbon tax is to reduce greenhouse emissions. Carbon taxation is the main alternative to emissions trading.

CLEAN DEVELOPMENT MECHANISM: One of the three mechanisms set up by the Kyoto Protocol to, in theory, allow reductions in greenhouse-gas emissions to be implemented where they are most economical. Under the Clean Development Mechanism, polluters in wealthy countries can obtain carbon credits (greenhouse pollution rights) by funding reductions in greenhouse emissions in developing countries.

EMISSIONS CAP: Government-mandated upper limit on total amount to be emitted of some pollutant (e.g., carbon dioxide) by all polluters in a country, region, or class.

GREENHOUSE GASES: Gases that cause Earth to retain more thermal energy by absorbing infrared light emitted by Earth's surface. The most important greenhouse gases are water vapor, carbon dioxide, methane, nitrous oxide, and various artificial chemicals such as chlorofluorocarbons. All but the latter are naturally occurring, but human activity over the last several centuries has significantly increased the amounts of carbon dioxide, methane, and nitrous oxide in Earth's atmosphere, causing global warming and global climate change.

KYOTO PROTOCOL: Extension in 1997 of the 1992 United Nations Framework Convention on Climate Change (UNFCCC), an international treaty signed by almost all countries with the goal of mitigating climate change. The United States, as of early 2008, was the only industrialized country to have not ratified the Kyoto Protocol, which is due to be replaced by an improved and updated agreement starting in 2012.

RENEWABLE ENERGY: Energy obtained from sources that are renewed at once, or fairly rapidly, by natural or managed processes that can be expected to continue indefinitely. Wind, sun, wood, crops, and waves can all be sources of renewable energy.

In the first phase of the first ECCP (2000–2001), six expert working groups were set up to identify cost-effective measures to reduce greenhouse emissions that could be pursued at the EU level. Five were devoted to research, industry, transport, energy consumption, and energy supply. The sixth was devoted to the three market-based schemes for reducing greenhouse emissions specified by the Kyoto Protocol, namely: 1) the clean development mechanism, 2) emissions trading, and 3) joint implementation. All three of these flexible mechanisms, as they are called, involve the exchange of carbon credits under a legally defined cap or upper limit. A carbon credit is a symbolic tool, similar to a unit of money, that has a certain agreed-upon value, namely, a single ton of CO₂ or a quantity of some other greenhouse gas, such as methane (CH₄), that produces as much greenhouse warming as would a single ton of CO₂. The goal of all three of Kyoto's flexible mechanisms is to allow for reductions in emissions to be made where they can be purchased most cheaply, whether in industrialized countries or poorer parts of the world. Since there is only one atmosphere, it does not, in theory, matter where a ton of CO₂ is removed from the air, as long as it is removed.

The first ECCP produced recommendations for action by the EU in 2001. These recommendations were then weighed and acted upon by the European Commission and the European Parliament (which, together with the Council of the European Union, forms the legislative branch of the EU). The first ECCP was succeeded in October 2005 by the second ECCP, which formed a new set of working groups to examine various aspects of climate policy and produce further recommendations. As of November 2007, the second ECCP was still preparing its reports.

Impacts and Issues

In response to the recommendations of the first ECCP, the EU took several steps. The most significant was the establishment of the EU Emissions Trading Scheme, which began operation in January 2005. This is a cap-and-trade scheme in which carbon credits are allotted to individual greenhouse polluters by national governments. A given number of credits allows the polluter (say, a power plant) to emit an equal number of tons of CO₂ or an equivalent amount of some other gas. Polluters may buy and sell the credits or, under the Clean Development Mechanism, obtain new credits by funding greenhouse mitigation projects in developing countries. The system embraces only countries in the EU and those developing countries that agree to participate in the Clean Development Mechanism.

As of 2006, the system embraced about 11,500 European greenhouse polluters in the power, heat, and industrial sectors. In 2004, the European Commission proposed extending the Emissions Trading Scheme to include airlines operating out of EU airports. Implementation of an Aviation Emissions Trading Scheme was scheduled to begin in 2008.

Europe's climate policy has been criticized as ineffective. Although European emissions overall appeared on track as of late 2007 to meet the Kyoto goal of 8% reductions below 1990 levels by 2012, some countries had accomplished significant reductions while others had seen significant increases. For example, Germany's 2007 emissions were 19% below its 1990 levels, a decrease achieved despite brisk economic growth, but France's emissions grew 9% in the same period. (For comparison, U.S. emissions rose 16.3% from 1990 to 2005.) The European Emissions Trading Scheme has been accused of being fruitless because caps were set too high, allowing polluters to make little or no changes in practice while endowing them with a new, valuable commodity to trade, namely carbon credits.

In November 2006, responding to criticism that emissions quotas had been set too high to be meaningful, the European Commission announced that EU member states must decrease emission-credits quotas for their largest polluters. In March 2007, the 27 EU heads of state convened a climate summit and decided to commit the EU to mandatory reduction of its overall greenhouse-gas emissions of 20–30% below 1990 levels by 2020. Talks for the successor treaty to Kyoto commenced in late 2007. It seemed likely that European climate policy's emphasis on binding emissions caps and direct carbon taxes (in some countries) would remain unacceptable to U.S. business interests and U.S. politicians.

Primary Source Connection

This article discusses efforts by the European Union (EU) to reduce greenhouse gas emissions in Europe. The EU's European Climate Change Programme (ECCP) has been instrumental in devising measures and standards for EU member states. ECCP's efforts, along with additional measures taken by individual member states, have reduced overall greenhouse gas emissions in Europe over the last several years.

EUROPEAN CLIMATE CHANGE PROGRAMME: EU ACTION AGAINST CLIMATE CHANGE

EU policies on climate change

The European Union has long been committed to international efforts to tackle climate change and felt the duty to set an example through robust policy-making at home. At European level a comprehensive package of policy measures to reduce greenhouse gas emissions has been initiated through the European Climate Change Programme (ECCP). Each of the 25 EU Member States has also put in place its own domestic actions that build on the ECCP measures or complement them.

The First European Climate Change Programme (2000–2004)

The European Commission established the ECCP in 2000 to help identify the most environmentally effective and most cost-effective policies and measures that can be taken at European level to cut greenhouse gas emissions. The immediate goal is to help ensure that the EU meets its target for reducing emissions under the Kyoto Protocol. This requires the 15 countries that were EU members before 2004 to cut their combined emissions of greenhouse gases to 8% below the 1990 level by 2012.

The ECCP builds on existing emissions-related activities at EU level, for instance in the field of renewable energy and energy demand management. It also dovetails with the EU's Sixth Environmental Action Programme (2002–2012), which forms the strategic framework for EU environmental action and includes climate change among its four top priorities, as well as the EU's Sustainable Development Strategy.

The ECCP is a multi-stakeholder consultative process that has brought together all relevant players, such as the Commission, national experts, industry and the NGO community. Stakeholder involvement is an essential element of the ECCP because it enables the programme to draw on a broad spectrum of expertise and helps to build consensus, thereby facilitating the implementation of the resulting policies and measures.

The first ECCP examined an extensive range of policy sectors and instruments with potential for reducing greenhouse gas emissions. Coordinated by an ECCP Steering Committee, 11 working groups were established covering the following areas:

Flexible mechanisms: emissions trading
Flexible mechanisms: Joint Implementation and Clean Development Mechanism
Energy supply
Energy demand
Energy efficiency in end-use equipment and industrial processes
Transport
Industry (sub-groups were established on fluorinated gases, renewable raw materials and voluntary agreements)
Research
Agriculture
Sinks in agricultural soils
Forest-related sinks

Each working group identified options and potential for reducing emissions based on cost-effectiveness. The impact on other policy areas was also taken into account, including ancillary benefits, for instance in terms of energy security and air quality….

Progress towards meeting the EU's Kyoto commitment

The EU's greenhouse gas emissions have been falling thanks to the combined impact of policies and measures resulting from the first ECCP, domestic action taken by Member States and the restructuring of European industry, particularly in central and eastern Europe.

By 2003, combined emissions from today's 25 Member States (EU-25) were down 8% compared to their levels in the respective base years (mostly 1990). Emissions from the 15 ‘old’ Member States (EU–15) had fallen by 1.7%, or 2.9% averaged over 1999–2003.

Latest projections show that additional domestic policies and measures planned by Member States but not yet implemented will take the reduction in EU–15 emissions to 6.8% below 1990 levels by 2010. In addition, use of the Kyoto Protocol's flexible mechanisms Joint Implementation and the Clean Development Mechanism will reduce emissions by a further 2.5%, taking EU–15 emissions in 2010 to 9.3% below 1990 levels—more than enough to meet the EU–15's reduction commitment of 8%.

For the EU-25 latest projections indicate that the implementation of additional policies and measures planned by Member States will reduce emissions to 9.3% below base year levels by 2010. Use of the Kyoto mechanisms will achieve an additional 2% reduction.

Future perspectives

The EU is convinced that strong global action to combat climate change will continue to be needed after 2012, when the Kyoto Protocol's targets are due to have been met. It therefore favours an early start to negotiations on an international climate regime for the post– 2012 period.

In a policy document published in early 2005 the Commission outlined the key elements that a post–2012 regime will need to incorporate. The Commission wants to see participation by all major emitters and economic sectors, greater innovation in emissions-saving technologies, continued use of cost-effective market-based instruments and the implementation of strategies for adapting to the level of climate change that is already unavoidable.

Many of the EU policies and measures now in place will be important for cutting greenhouse gas emissions beyond 2012. It is already foreseen, for example, that the EU Emissions Trading Scheme will continue in five-year periods after 2012.

But it is also clear that deeper emissions cuts will be needed after 2012 if the international community is to win the battle against climate change, and further EU policies and measures will be required to achieve these. Consequently the Commission has initiated the Second European Climate Change Programme (ECCP II).

The Second European Climate Change Programme (2005–)

ECCP II was launched in October 2005 at a major stakeholder conference in Brussels. It will explore further cost-effective options for reducing greenhouse gas emissions in synergy with the EU's ‘Lisbon strategy’ for increasing economic growth and job creation.

New working groups have been established, covering carbon capture and geological storage, CO₂ emissions from light-duty vehicles, emissions from aviation, and adaptation to the effects of climate change.

The aviation group will focus on the technical aspects of bringing aircraft emissions into the Emissions Trading Scheme, which the Commission considers the most promising way to tackle the rapid growth in emissions from this sector.

One working group will also assess the implementation of the ECCP I policies and measures in the Member States and their effects in terms of emission reductions. This will feed into a broader ECCP I review process and give guidance to the Commission and the Member States on any supplementary efforts that may be needed to meet the EU's Kyoto commitment.

european climate change programme: eu action against climate change. european communities, 2006.

BIBLIOGRAPHY

Books

Harris, Paul G. Europe and Global Climate Change: Politics, Foreign Policy and Regional Cooperation. Northampton, MA: Edward Elgar Publishing, 2007.

Periodicals

Biermann, Frank. “Between the USA and the South: Strategic Choices for European Climate Policy.” Climate Policy 5 (2005): 273–290.

Hepburn, Cameron. “Carbon Trading: A Review of the Kyoto Mechanisms.” Annual Review of Environment and Resources 32 (2007): 375–393.

Schiermeier, Quirin. “Europe Moves to Secure Its Future Energy Supply.” Nature 445 (January 18, 2007): 234–235.

Web Sites

Dohmen, Frank, Alexander Neubacher, Sebastian Knauer, and Wolfgang Reuter. “A Europe Divided Over Climate Policy.” Der Spiegel (Germany), February 17, 2007. < http://www.spiegel.de/international/spiegel/0,1518,467367,00.html> (accessed November 20, 2007).

“European Climate Change Programme: EU Action Against Climate Change.” European Communities, 2006. < http://ec.europa.eu/environment/climat/pdf/eu_climate_change_progr.pdf> (accessed November 20, 2007).

Larry Gilman

Climate Change: In Context