Environmental (climate) dimension of the EEP
Filip Černoch
cernoch@mail.muni.cz
Energy policy of the EU
Environmental dimension of EEP
• Energy sector (extraction, transport, processing and
combustion) harms the environment significantly.
• Climate change (regional/global level) – measures to reduce
GHG emissions.
• EU ETS, GHGs outside of the EU ETS.
• RES.
• Energy Efficiency.
• Research and development, new technologies (CCS).
• Local environment protection – covered mainly by EU
environmental policy.
• Air, land and water pollution, noice, light pollution.
• Industrial (energy) waste.
• Protection of biodiversity.
• Extraction of non-conventional sources of energy.
Greenhouse gas effect
Period between 1985 - 2000
New incentives for energy on the EC level.
• Weak competitiveness of European industry – first
proposals to create the internal energy market. Competition
and transparency instead of national monopolies and closed
markets.
• Climate change – tools to prevent impact of usage of
energy on local and global level. (to reduce the amount of
emissions produced in the EU).
• Disintegration of Soviet block – proposals to manage
relations between producents and consumers (EU MS) of
energy.
Environmental dimension of EEP
Two interlinked (but not identical) processes:
• International regime of climate change mitigation (EU
plays a significant role).
• Independent climate policy of the EU (part of the EU
energy policy).
International climate regime
• Intergovernmental Panel on Climate Change – 1988.
• Rio Summit on Earth – 1992 (UN Conference on
Environment and Development) → UNFCCC.
• Kyoto protocol.
• 1997, in force 2005.
= Existence of a generally accepted consensus on the climate
change as well as the contribution of human activities to this
process.
Kyoto protocol
• 4 GHG (carbon dioxide, methane, nitrous oxide, sulphur
haxafluoride) + hydrofluorocarbons and pefluorocarbons.
• Annex I. parties (37 industrialized countries + EU15),
Non-annex I. parties.
• Reducing of GHG emissions by 5,2 % for the period of
2008-2012. (4,2 % after USA left). Base year 1990.
• Flexible mechanisms – Emission trading, CDM, JI.
• Art. 4 – burden sharing agreement of European
Community.
• Common but differenciated responsibility.
9
EU and climate change
• Environmental awareness.
• Preemptive environmental measures.
• Common market.
• Cross-border cooperation.
• Raison d'être.
130r (TEU) „…Community policy on the environment…shall be based on the
precautionary principle and on the principles that preventive action should be taken, that
environmental damage should as a priority be rectified as source and that the polluter
should pay“.
EU and climate change: carbon tax
Emission trading
•EU firstly sceptical about international emission
trading.
• See it morally wrong – trading authorizes pollution, turning
it into commodity to be bought and sold.
• Questionable with regard to equity – that the richer
industrialized countries can buy their way out of their
obligations instead of lowering their disproportionate
consumption of scarce sources.
•But – change in the possition of the U.S. placed the
EU in the forefront of the climate change movement.
EU and climate change: emission trading
ET: Central authority … sets a limit …on the amount of
pollutant to be emitted … the cap is sold/allocated …. as
permits ….companies are required to hold those permits …if
they need to increase this volume…have to buy those premits or
pay the fee.
= the buyer is paying a charge for polution = he is motivated to
invest in less-poluting technologies.
How the system works?
• It creates a dynamic monetary incentive so companies can
sell their allowances to other producers and make profit.
• This incentives are based on real needs (scarcity) of
allowances and on adequate monitoring and enforcement.
• This system (at least in theory) offer certainity of emission
reduction corresponding to the stringency of the cap.
• Unlike domestic schemes effective international systems
are more difficult to establish.
• Even a well-designed system is not to work if it is not
implemented correctly by the participants in the system
(MS).
Run-up to the EU ETS
• 1988 EC´s communication „The Greenhouse Effect and the
Community“.
• 1998 EC´s communication „Climate Change - Towards an EU
post-Kyoto strategy“.
• 1999 EC´s communication „Preparing for Implementation of
the Kyoto Protocol“.
• 2001 – EU ETS legal preparation launched, approved in 2003.
• Designated the first period from 1.1.2005 to 31.12.2007,
covering about 11.500 facilities in 25 MS = 45% CO2 emitted
in the EU.
EU ETS: The first phase 2005 - 2007
Country Mil. EUAs Share of the overal
amount of EUA
Number of incl. facilities The aim of
Kyoto
Belgium 188,8 2,9 363 -7,5
Czech Republic 292,8 4,4 435 -8
Denmark 100,5 1,5 378 -21
Estonia 56,85 0,9 43 -8
Finland 136,5 2,1 535 0
France 469,5 7,1 1 172 0
Ireland 67 1 143 +13
Italy 697,5 10,6 1 240 -6,5
Cyprus 16,98 0,3 13 Luxembourg
10,07 0,2 19 -28
Lithuania 36,8 0,6 93 -8
Latvia 13,7 0,2 95 -8
Zdroj: Massai, 2012, s. 174
EU ETS: The first phase 2005 - 2007
• Problems with the decentralised system of distribution.
• Overestimation of emissions – with the exemption of
Germany and Slovenia (4 % surplus).
• Drop in the prices of allowances.
• Very limited impact on emissions of GHG.
• NAP – only Austria, Denmark, Finland, Germany, Ireland and
Slovenia in time.
EU ETS: The first phase 2005 - 2007
Difficult calculations due to:
• Proneness to cheating.
• Changing level of industrial production.
• Changes in energy prices.
• Increasing deployment of RES (canibalism of targets).
• Permit stockpiling.
• Weather.
• And others.
Not only GHGs decrease is desirable, but also the stability of
price of EUAs.
Sources
• Linklaters (2014): Capacity mechanisms. Reigniting Europe´s
energy markets.