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ISSUE Nº 64

MAY 2012

Hotspot Climate Action Network Europe

CLIMATE & ENERGY POLICY NEWS FROM EUROPE

In this issue p.1 ENTERING THE END GAME ON THE ENERGY EFFICIENCY DIRECTIVE? A STORY OF HEROES AND VILLAINS

p.2 PRIVATE CLIMATE FINANCE: A SILVER BULLET, OR AN EMPTY BUCKET?

p.3 THE ROADS TO RIO+20

p.4 ON THE BONN AGENDA: THE DURBAN PLATFORM AND A SECOND COMMITMENT PERIOD FOR THE KYOTO PROTOCOL

Entering the End Game on the Energy Efficiency Directive? A story of heroes and villains BY ERICA HOPE, CAN EUROPE SENIOR POLICY OFFICER After months of discussion, lobbying and speculation, the European Parliament and Council are set to enter negotiations on the Energy Efficiency Directive (EED). Officially the two institutions aim to reach an agreement on the Directive by the end of the Danish Presidency in June. But looking at how far apart their respective starting positions are, a great deal of flexibility on the part of one or both players will be required if this is to happen. Without further action, the EU will miss its 2020 target of cutting its energy use by 20% by at least half. We will miss out on billions of Euros of savings on energy import and consumer bills, hundreds of thousands of new green jobs, and it will have major implications for Europe’s energy infrastructure. It will seriously compromise our chances of cost-effectively meeting Europe’s commitment to reduce greenhouse gas emissions by 80-95% by 2050. This Directive also provides a vital opportunity to start shifting Europe’s energy model towards one that is based on delivering energy services rather than simply selling as much – often wasted energy as possible. In other words, giving people a warm home rather than just a bill for fuel.

We now have a clear case of heroes and villains: European Parliament good; Member States bad. First the bad. According to the Coalition for Energy Savings, the version of the Directive put forward by the Council, i.e., Member States, would only close a third of the gap towards meeting the 20% target. Member States are not supporting binding targets and have sought to significantly weaken the impact of the sub-target to deliver 1.5% cumulative annual savings via energy company obligation schemes or their equivalents. The range of creative attacks includes: omitting 40% of energy used by ETS industries when calculating the 1.5% savings volume, counting actions carried out as far back as 2008 towards the target, and phasing in the 1.5% savings rate over a number of years. Member States also want the public building renovation target to apply only to buildings that are both owned and occupied by central government authorities. Public procurement rules would be nearly entirely voluntary; and the initially tough provisions on combined heat and power production have been diminished to a toothless requirement to merely carry out cost benefit analyses. The Good. In late February members of the European Parliament’s Energy Committee adopted a mandate to significantly improve the Commission’s proposal. Perhaps it helped that they were greeted by posters of the MEPs working on the Directive dressed as energy superheroes on their walk into work, and given last-minute encouragement on their way into the vote by “Energy Savings Man” and his sidekicks. The result was a package of 18 compromise amendments supported by all the major political groups. MEPs’ demands include binding, effort-shared targets for Member States, and national trajectories to mark out the path to 2020. An element of conditionality is introduced, so that if Member States can demonstrate that they >> Continue on p.2

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HOTSPOT NEWSLETTER NÂş 64

MAY 2012

EU POLICY FOCUS May and June are set to be very busy for climate and energy policy developments in the EU. The &RXQFLO3DUOLDPHQWDQG&RPPLVVLRQDUHFXUUHQWO\LQWULDORJXHGLVFXVVLRQVRYHUWKH(QHUJ\(IÀFLHQF\'LUHFWLYH ((' ,IDQ DJUHHPHQWLVUHDFKHGWKHQLWLVH[SHFWHGWRJRSOHQDU\DWWKH3DUOLDPHQWEHIRUHWKHHQGRI-XQH7KH'DQLVK3UHVLGHQF\ UHPDLQVRSWLPLVWLFWKDWQHJRWLDWLRQVRQWKH(('ZLOOEHFRQFOXGHGEHIRUHWKHLUWHUPHQGVRQ-XQHEXWWKHGHDGOLQHLV IDVWDSSURDFKLQJ0HDQZKLOHDWWKHHQGRI0D\WKH&RPPLVVLRQLVH[SHFWHGWRSURGXFHWKH&RPPXQLFDWLRQœ5HQHZDEOH (QHUJ\6WUDWHJ\¡WKDWZLOOIHHGLQWRWKH(QHUJ\&RXQFLOGLVFXVVLRQVRQWKH(QHUJ\5RDGPDSGXULQJ-XQH

Private climate finance: a silver bullet, or an empty bucket? BY MATTIAS SĂ–DERBERG, DANISH CHURCH AID SENIOR ADVOCACY ADVISER When talking to EU delegates about climate finance you can be sure that private finance will be mentioned within the first few sentences. In a time where EU member states struggle to keep their national budgets above the red lines, increased allocations for climate finance are not popular. However, there is a global agreement to increase annual climate finance up to the USD$100 billion by 2020. Acknowledging this target, EU countries have started to look for alternative sources, and there is an increasing hope that private finance is the answer. At the recent workshop on climate finance in Copenhagen (hosted by the Danish Presidency), private finance was one of the main themes. We can assume there was a lot to talk about, because when negotiators are questioned about private finance they are seldom able to explain how it should work. Private finance can potentially cover a lot. Carbon markets would be one type of mechanism to mobilize private finance, however western countries are also watching the flow of private investments. Whilst the global flow of Overseas Development Aid (ODA) is little more than US$100 billion a year, the flow of foreign investments into developing countries tops more than US$500 billion a year. The basic principles of private finance is that it is controlled by private interests,

looking for profit, and therefore it is not necessarily an easy task for governments to move investments to particular countries or activities. Looking closely at the current flow of foreign investments, the vast majority of the funds are going to emerging economies, and to sectors with no links to either mitigation or adaptation. The least developed countries receive few investments, and a majority of these are invested in extractive industries. It is difficult to make a profit out of adaptation, and as a consequence there are few examples of private finance for such activities. Apart from the challenge to attract investments, private finance will also have difficulties living up to existing guidelines for climate finance. Private investments are expected to deliver a return, and these funds will in many cases come from developing countries, which would contradict existing agreements stating that developed countries should mobilize the funds. Private finance is also not easily aligned with any principle of monitoring, reporting and verification (MRV), and without a clear framework it is difficult to ensure that investments contribute to the fulfillment of national mitigation and adaptation plans (NAMAs, NAPAs and NAPs) in developing countries. When analyzing the challenges, the opportunities should also be highlighted, and there are many. The private sector will certainly have an important role to play, both as a financial source, and

in relation to technology transfer. The finance workshop in Copenhagen gave EU Member States a chance to address some of the challenges. Further talks, and a transparent debate, will be needed, including both the private sector and civil society organizations. We as NGOs hope to continue that dialogue with the EU Member States and the Presidency at the UNFCCC Intersessional being held in Bonn this May. Q

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are on track to their overall national targets the Commission may allow deviation from the sub-targets on public buildings and energy company obligations. MEPs also want to see the 1.5% savings requirement expanded to cover energy used by transport, and public building renovations to be “deep� or “staged�. In addition, they ask Member States to develop national roadmaps for the deep renovation of their entire building stock by 2050, and to establish national financing facilities for the aggregation and allocation of funds. Finally, they ask the Commission to come

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forward with a proposal to amend the ETS, if needed, in order to accommodate the impact of the EED. So what next? Economic times are tough, and it’s a very different political context than during the 2008 Climate and Energy Package. One glimmer of hope is that the Council’s overall negative mandate masks a number of specific national positions that are more positive. Much may therefore depend on whether the Danish Presidency manages to overcome its apparent submissiveness to the noisiest negative countries.

The European Commission must become considerably more interventionist and balanced in defence of its own proposal. Parliament must continue to support a progressive outcome. A final point is timing: although a swift agreement is still the stated desire, it would be very unfortunate if attainment of this objective came at the expense of an effective, ambitious Directive. One thing is for sure, Energy Savings Man will be hovering attentively overhead, lycra and all, for the duration! Q


HOTSPOT NEWSLETTER NÂş 64

MAY 2012

The Roads to Rio+20 BY PAUL HORSMAN, GCCA GLOBAL CAMPAIGN DIRECTOR All Roads lead to Rome – or so the saying goes. At the moment it seems that all roads lead to Rio de Janeiro. Brazil is preparing to host the Rio+20 UN Conference on Sustainable Development (UNCSD) twenty years after it hosted the UN Conference on Environment and Development (UNCED), the so-called ‘Earth Summit’ in 1992. The first Rio summit failed to achieve its goal of making all economic development sustainable. This time, the UN Global Sustainability Panel has produced a background document, Resilient People, Resilient Planet – A Future Worth Choosing1. It attempts identify and clarify what sustainable development means and what action is needed. At the first Earth Summit the UN Framework Convention on Climate Change was signed, the intention being to achieve “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system�. With this goal’s resounding failure in mind, to avoid climate politics muddying the waters at Rio+20, climate will not be directly discussed. However, many issues – such as energy, finance, agriculture, forests – are directly related to climate, and changing climate is one key indicator of the unsustainable path the world is currently on. Rio+ 20 will focus on the themes of green economy in the context of poverty eradication and sustainable development, as well as the Institutional Framework for Sustainable Development. The stated objectives are: securing a political commitment to sustainable development; assessing progress towards internationally agreed commitments; and addressing new and emerging challenges. In other words Rio+20 is a moment of taking stock and addressing the path forward without the creation of new treaties or conventions, though there is the possibility that the discussions may eventually lead to Sustainable Development Goals. The basis for the Rio+20 negotiations is a ‘zero draft’ document called The Future We Want and is the result of input from 677 governments and civil society organisations.

It proposes that Rio+20 produces several new initiatives including: „ reform of the UN's Commission on

Sustainable Development (CSD); „ strengthening or transformation of the

UN’s Environment Programme (UNEP); „ a regular UN Secretary General review

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of the state of the planet and the Earth's carrying capacity; establishment of an Ombudsperson or High Commissioner for Future Generations; a 10-Year Framework of Programmes on Sustainable Consumption and Production; launching a set of global Sustainable Development Goals by 2015 built from the experience of the UN Millennium Development Goals; development and strengthening of economic, social and environmental dimensions indicators to complement Gross Domestic Products.

The draft prioritizes issues and areas including food security; water; energy; cities; green jobs; and it tries to address some of the impacts of international trade on sustainability. The original document was 19 pages but it now exceeds 200 pages following the recent UN session in New York. Negotiators are coming to Rio with their government positions geared more towards protecting national self-interest rather than seeking to achieve agreements for the global common good. There will be some long and hard discussions before any kind of possible agreement will surface. Negotiations are more likely to sink to the lowest common denominator rather than reach for the highest ambition. Rio +20 represents an opportunity for demonstrating solutions and articulating a vision of what a sustainable low carbon and climate resilient society might look like. CAN International and others are calling for an ‘equitable green economy’2, including phasing out fossil fuel subsidies. Such subsidies maintain the current addiction to fossil fuels and distort the market, preventing the adoption of renewable energy technologies and systems. There is some

1 http://www.un.org/gsp/report 2 Building an Equitable Green Economy – a paper produced by an independent Southern drafting group commissioned by the Danish 92 Group. It lays out a Southern perspective on how a Green Economy as discussed in the Rio+20 context must be designed to contribute to, rather than distract from, sustainable development. http://www.92grp.dk/cms/images/Fokus%20og%20Nyheder/Equitable_Green_economy_brochure.pdf 3 Contact Paul.Horsman@tcktcktck.org if you want more information on the fossil fuel subisidies campaigning.

momentum behind campaigning for a significant outcome on this issue at Rio*3. At GCCA we have organised two public engagement projects, including a date with History which is a global competition where young people aged 18-30 can submit a speech which, if chosen, could be delivered in Rio. See www.datewithhistory. com for more information. Rio+20 can be a platform for public engagement and mobilisation on the issues that are of direct relevance to our work on climate within the sustainable development area. With at least 115 Heads of State committed to attending Rio+20, it will indeed be a Summit. Q

HOTGOSSIP In a rapid response to continuing decline LQFDUERQSULFHVWKDWEHJDQMXVWĂ€YH \HDUVDJRLQ²WKH&RPPLVVLRQKDV VZRRSHGLQWRVDYHWKHGD\RUDWOHDVW try to. Perhaps they have been inspired by the heroic actions of Energy Savings Man and his sidekicks? Commissioner Hedegaard announced WKH(8ZRXOGUHYLHZLWVDXFWLRQLQJUXOHV for emissions permits. This may lead to a temporary limit to the number of DOORZDQFHVDYDLODEOHDQGDQHQGWR KLVWRULFDOO\ORZFDUERQSULFHVLQWKHQH[W (76WUDGLQJSHULRG  ,QD very strong statement, Hedegaard stated VKHZRXOG´FRQVLGHUEULQJLQJIRUZDUG a proposal to the Climate Change Committee for decision this yearâ€?. The committee does not need unanimity in order to change the auctioning rules. 3KKKKHZZZZKDWDUHOLHI7KLVPHDQV XQQDPHG0HPEHU6WDWHVZLOOQRWEH able to block improvements to the ETS. ,QFLGHQWDOO\LQDQLQWHUYLHZZLWK5HXWHUV Poland’s Environment Minister Marcin Korolec heavily criticised any future FKDQJHVWRWKH(76,ZRQGHUKRZWKH\ ZLOOYRWH"

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HOTSPOT NEWSLETTER Nº 64

MAY 2012

On the Bonn Agenda: the Durban Platform and a second commitment period for the Kyoto Protocol BY ULRIIKKA AARNIO, CAN EUROPE SENIOR POLICY OFFICER The UNFCCC Intersessional in Bonn will probably not create many headlines but it should be a busy time for moving the process forward. If it will in fact make any progress, is yet to be seen. In 2012 countries have agreed to adopt a ratifiable second commitment period of the Kyoto Protocol, create a workplan for the Durban Platform for Enhanced Action, agreed to address the inadequacy of 2020 mitigation targets, and bring the LCA track to closure. In addition to all this, there will be workshops on equity and mitigation ambition as well as meetings for the Subsidiary Bodies. What will be the main focus? It is likely that the most attention will be given to the negotiations on the workplan for the Ad Hoc Working Group on Durban Platform for Enhanced Action (ADP). The ADP is to deliver a legally binding outcome at the latest by 2015. There are a few important issues on the table that still need to be finalised before a proper adoption of a 2nd commitment period of the Kyoto Protocol will be possible: the length, the quantified economy-wide reduction targets (QELROs), and last but not least how to deal with the hot air, the surplus Assigned Amount Units (AAUs) leftover from the first Commitment Period. The biggest shortcoming of the Durban decisions was the lack of action on increasing the near term post-2012

Published by Climate Action Network (CAN) Europe, the European office of CAN- a global coalition of over 750 NGOs working to halt the most dangerous effects of climate change. CAN Europe promotes action to limit human-induced climate change to ecologically sustainable levels. CAN Europe represents over 150 members in 27 European countries, including most EU member states.

mitigation ambition. The world is currently heading for 3.5°C warming and if the 2020 mitigation gap is not bridged the 1.5°C and 2°C targets are no longer reachable. ADP must not shift its focus away from what is now most important, the 2020 targets. In Durban, governments also agreed to finalise AWG-LCA at COP18 in Qatar. There are equally many politically difficult issues unresolved, such as the peaking year of global emissions and global reduction goal for 2050 among many others. If all of these are not resolved, then these agenda items need to be found a new home. Countries must also agree on the follow up of the implementation of the commitments made in Cancun and Durban. As inadequate they are, they still need to be reached. We are approaching the post-2012 period of negotiations very rapidly and can expect more significant developments from 2013 onwards. Still, there remains a lot to do before this year is out. Q

NEW MEMBERS OF STAFF Eddy De Neef is the new CAN-Europe Network Outreach Coordinator and will begin working full time for CAN from 14 May 2012. Eddy has a long history of working for NGOs. For more than a decade he worked at 11.11.11, the Flemish umbrella organisation for NGOs working on NorthSouth development issues, and spent 3 years at Greenpeace Belgium as their Media Officer. He was born and raised in Brussels and is looking forward to working with CAN-Europe members across Europe. Daniel Fraile Montoro joined CAN-Europe in March as our new Policy Officer for EU Climate and Energy. Prior to this he worked for the European Photovoltaic Industry Association (EPIA ) as a scientific advisor, providing advice to the policy department and coordinating various international projects, including those from the European Commission and the International Energy Agency. Before working for EPIA, he was based at the Spanish electric utility company Iberdrola at their Brussels office, where he gained experience in European policies and international relationships. He graduated with a Masters in Renewable Energies, focusing on Photovoltaics, and prior to this studied telecommunications engineering.

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Hotspot

CAN Europe gratefully acknowledges support from the European Commission NEWSLETTER STAFF Editor Responsible Wendel Trio Editor in Chief Vanessa Bulkacz Sub-Editor Matthew Keys Subscriptions Email matthew[a]caneurope.org or subscribe via the CAN Europe website at www.caneurope.org, or via mail: HOTSPOT Newsletter CAN Europe Mundo B, 4th Floor Rue d’Edimbourg 26 1050 Brussels BELGIUM HOTSPOT is also available online at www.caneurope.org Photo credits p.2 Don DeBold p.3 Priscilla Jordão p.4 UNFCCC All other photos courtesy CAN Europe or creative commons licensing. Layout: www.beelzePub.com Views expressed do not automatically reflect the policies or positions of CAN-Europe

CALENDAR May 10: Full IPCC SREX extreme weather report launched May 14-25: UNFCCC Intersessional meeting, Bonn Jun 11: Environment Council Jun 20-22: Rio +20 UNCSD Jun 22: ECOFIN Council Jun 28-29: EU (HoS) Council


Hotspot Issue 64 May 2012