EU Climate Change Laws Will Lead World by Example

25 January 2008

LONDON - The °Climate Group welcomed Europe's new climate change package announced yesterday and hailed it as a bold lead for the rest of the world to follow.

The Commission's proposal for "effort sharing" emissions reductions across the European Union and new draft directives for the third phase of the EU ETS (Emissions Trading Scheme) and for the promotion of renewable energy and transport outlines how each EU member state will contribute to realising Europe's 20-20-20 vision (20 per cent emissions reductions and 20 per cent renewables by 2020).

Mark Kenber, Policy Director of The °Climate Group, said, "Europe's much-needed tightening of the ETS and new renewables targets will accelerate global momentum towards a post-2012 climate deal by setting a leading example to other industrialized countries that climate change can be tackled effectively without compromising competitiveness."

However, The °Climate Group urged the European Parliament and Council to act swiftly to reach final agreement over the main provisions of the package and to step up the level of ambition by planning to meet the 30 per cent emission reductions that EU Heads of State pledged to achieve if a robust new international climate policy framework is agreed.

Mark Kenber said, "Pushing for swift adoption by member states and showing confidence in the Bali Work Plan will strengthen Europe's leading position in international negotiations and underpin a successful and effective new international agreement on climate change required by the end of 2009. Deep cuts in emissions achieved through these new measures will also strengthen the credibility of the cap-and-trade mechanism as a blueprint for the global low carbon economy."

The EU directive will tighten the system of issuing free permits which originally resulted in huge windfall profits for polluters with only small reductions in GHG emissions. Under the Commission's new proposal, all power generators and increasingly other energy-intensive industry sectors will be forced to bid for emissions permits.

Mark Kenber, Policy Director of The °Climate Group, said, "Clearly more permits should be auctioned, but the important thing is that a functioning market now exists for Europe and the rest of the world to draw upon. Power generators and other carbon-intensive businesses need to heed the science and accept that they can no longer expect to make easy profits without cutting emissions - there is too much at stake."

The °Climate Group supports full auctioning of permits for the power generation sector but recognises a more gradual introduction of auctions may be necessary to ensure other energy-intensive businesses remain competitive while making deeper cuts.

Addressing fears that strengthening the ETS could affect international trade and unfairly penalize EU businesses, Kenber said, "No business should have to move out of Europe because of this directive; the intent is to effect meaningful emissions reductions where they are and not to transfer the problem elsewhere. Countries outside the EU should not sit on their hands - or rub them - but rather focus on how they can build on this bold lead with their own targets and legislation."

Commenting on energy efficiency targets, absent from the draft legislation despite earlier indications, Mark Kenber said, "Energy efficiency would have been one EU target that could have been achieved at zero net cost. Our research shows that for many companies, acting on climate change has become a straightforward business proposition and many are already seeing the economic and environmental benefits of taking action now to reduce the climate impact of their operations."

Growing the EU's low carbon economy

  • EU Targets: The EU made a commitment in March 2007 to reduce greenhouse gas emissions by 20 per cent by 2020 (against 1990 levels).
  • Green Power: An increasing number of European businesses are switching to green power for their manufacturing plants, stores and office facilities. A coalition of 14 leading European companies led by The °Climate Group and World Resources Institute, the Green Power Market Development Group - Europe, recently announced its first 100 MW of renewable energy projects to power more than 50 facilities in 16 European countries.
  • Wind Power: By 2010 UK wind turbine capacity is set to treble from 2GW to 6GW, generating power for 3 million homes. In the next decade, the UK offshore wind industry alone is predicted to provide 19,000 jobs.
  • Solar Power: Germany already boasts more than half of all of Europe's solar installed capacity and about 90% of the total global solar capacity.
  • Corporate Momentum:Nike is powering its largest Europe, Middle East and Africa distribution centre from a 9 MW on-site wind park. Michelin also generates 9 MW of on-site solar photovoltaic in Germany. Globally, Johnson & Johnson has reduced its CO2 emissions by 16.8% from 1990 to 2006 while increasing sales by 372%. J&J has saved US$30 million annually through energy efficiency measures over the last 10 years. The company uses geothermal energy and biomass boilers for heating and cooling at its European sites and is the second largest user of solar PV for a non-utility in the United States
  • National Momentum: Germany's renewables industry employs 235,000 people and expects to have as many as 400,000 jobs by 2020. In the UK, although absolute energy use has increased, residential energy efficiency has doubled since the 1970s, saving consumers £10 billion, whilst reducing carbon dioxide emissions by 28Mt CO2 per annum; almost as much as the combined emissions of the UK's coal power stations.
  • Public-Private Partnerships: Through energy-saving partnerships, Berlin has reduced {CO2} emissions by 60,000 tonnes per annum with savings of approximately ?6 million per annum


Nicholas Mandalas, International Media Manager, The Climate Group
+44 (0)207 960 2991

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