EU overzealous in cutting CO2 in the developing world - report
EU member states are planning to make such widespread use of carbon-reduction projects in the developing world that they could abandon cutting emissions at home, according to research published by WWF.
Analysis of carbon-allocation plans submitted for the second phase of the EU CO2 trading scheme (2008-2012) shows that EU countries are planning to make excessive use of carbon-reduction projects in the developing world. They will be importing credits from the developing world earned from Clean Development Mechanism (CDM) projects and from Joint Implementation (JI) projects.
"Some of the worst offenders are Ireland [*.pdf], Spain [*.pdf] and Poland [*.pdf] who plan to permit many more credits [abroad] than are needed to meet their overall emissions targets," said the WWF, which commissioned the research to consulting firm Ecofys [summary of the report, *.pdf]. Most projects concern the use of biofuels and bioenergy in processing industries in the developing world.
According to rules agreed by EU governments under the Kyoto Protocol on global warming, at least 50% of CO2 cuts must take place at home. In theory, the import of credits from CDM and JI projects should be supplemental, not substitute for efforts at home.
"Large use of imported credits can undermine technological innovation and transfer the responsibility for tackling climate change from polluting nations of the north to the developing world," the WWF said.
In addition, the Ecofys report suggests that EU nations have been over-generous in allocating pollution credits to heavy industry and power plants covered by the EU Emissions Trading Scheme (ETS) trading scheme:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: climate change :: CO2 :: Kyoto :: CDM :: Joint Implementation ::
Earlier this year, carbon prices plunged by more than 60% following reports that national governments had given away too many carbon-pollution credits to its industry.
"There are strong concerns that we could see little or no effort to cut emissions in Europe because of very weak caps and generous rules for using imported credits," said Delia Villagrasa, EU Emissions Trading Scheme expert at WWF.
Several months past the initial 30 June deadline, only 13 countries in the 25-nation bloc have submitted their plan for the second phase of the ETS. The Commission is due to take a decision on the first series of plans in November.
More information:
WWF: Too many imported credits threaten EU carbon trading (5 Oct. 2006)
WWF: Summary of the preliminary findings from the ECOFYS UK Report
Euractiv: Report - EU overzealous in seeking CO2 cuts abroad
Commission (DG Environment): National Allocation Plans for 2008 to 2012 notified to the Commission
Commission (DG Environment): National Allocation Plans for 2008 to 2012 notified to the Commission
Commission (DG Environment): Emission Trading Scheme (EU ETS)
Commission (DG Environment): Emission Trading Scheme (EU ETS) - Linking Joint Implementation (JI) and Clean Development Mechanism (CDM)
Article continues
Analysis of carbon-allocation plans submitted for the second phase of the EU CO2 trading scheme (2008-2012) shows that EU countries are planning to make excessive use of carbon-reduction projects in the developing world. They will be importing credits from the developing world earned from Clean Development Mechanism (CDM) projects and from Joint Implementation (JI) projects.
"Some of the worst offenders are Ireland [*.pdf], Spain [*.pdf] and Poland [*.pdf] who plan to permit many more credits [abroad] than are needed to meet their overall emissions targets," said the WWF, which commissioned the research to consulting firm Ecofys [summary of the report, *.pdf]. Most projects concern the use of biofuels and bioenergy in processing industries in the developing world.
According to rules agreed by EU governments under the Kyoto Protocol on global warming, at least 50% of CO2 cuts must take place at home. In theory, the import of credits from CDM and JI projects should be supplemental, not substitute for efforts at home.
"Large use of imported credits can undermine technological innovation and transfer the responsibility for tackling climate change from polluting nations of the north to the developing world," the WWF said.
In addition, the Ecofys report suggests that EU nations have been over-generous in allocating pollution credits to heavy industry and power plants covered by the EU Emissions Trading Scheme (ETS) trading scheme:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: climate change :: CO2 :: Kyoto :: CDM :: Joint Implementation ::
Earlier this year, carbon prices plunged by more than 60% following reports that national governments had given away too many carbon-pollution credits to its industry.
"There are strong concerns that we could see little or no effort to cut emissions in Europe because of very weak caps and generous rules for using imported credits," said Delia Villagrasa, EU Emissions Trading Scheme expert at WWF.
Several months past the initial 30 June deadline, only 13 countries in the 25-nation bloc have submitted their plan for the second phase of the ETS. The Commission is due to take a decision on the first series of plans in November.
More information:
WWF: Too many imported credits threaten EU carbon trading (5 Oct. 2006)
WWF: Summary of the preliminary findings from the ECOFYS UK Report
Euractiv: Report - EU overzealous in seeking CO2 cuts abroad
Commission (DG Environment): National Allocation Plans for 2008 to 2012 notified to the Commission
Commission (DG Environment): National Allocation Plans for 2008 to 2012 notified to the Commission
Commission (DG Environment): Emission Trading Scheme (EU ETS)
Commission (DG Environment): Emission Trading Scheme (EU ETS) - Linking Joint Implementation (JI) and Clean Development Mechanism (CDM)
Article continues
Saturday, October 07, 2006
European Union to establish global energy fund to boost investment in poor nations
The European Commission itself is now taking the initiative to blending these issues by creating a 100 million-euro global risk-capital fund to boost energy efficiency and renewable energy sources in developing nations. The Commission pledged to contribute four-fifths of the sum in the next four years. "This fund can mobilise private investments," the Brussels-based Commission said in a statement.
The Global Energy Efficiency and Renewable Energy Fund or GEEREF will accelerate the transfer, development and deployment of environmentally sound technologies and thereby help to bring secure energy supplies to people in poorer regions of the world. These projects will also combat climate change and air pollution. The Commission intends to kick-start the fund with a contribution of up to €80 million over the next four years, and expects that financing from other public and private sources will take funding to at least €100 million. This means that it will contribute to the financing of investment projects of a value up to 1 billion euro.
The Commissioner for the Environment, Stavros Dimas, and his collegue, Commissioner for Development Louis Michel are the driving force behind GEEREF:
Need for action
One of the the EU's goals is to ensure that the global temperature rises no more than 2ºC above pre-industrial levels, since beyond this level the impacts of climate change are forecast to be far more severe. Business-as usual energy scenarios for the coming decades predict high growth in both energy use and greenhouse gas emissions. ‘Accelerated technology’ scenarios demonstrate that it is possible to reduce global electricity demand by one third simply by improving overall energy efficiency. In addition, the growth of oil demand could be halved by raising the share of renewable energy for global electricity generation from today’s 13 per cent to 34 per cent in 2050. This will decrease the impacts on the environment and will in particular bring future carbon dioxide (CO2) emission levels back down to current levels the International Energy Agency says.
While the main responsibility for triggering these changes lies with industrialised countries, scaling up energy efficiency and renewable energy initiatives will greatly benefit developing countries by providing clean and secure energy supplies to people who currently have no access to reliable energy sources:
Overcoming investment barriers
Despite improving prospects, energy efficiency and renewable energy projects face significant difficulties in raising commercial funding. The problems are complex but mainly concern a lack of risk capital, which provides important collateral for lenders. The need for risk capital in developing countries and transition economies is estimated at over €9 billion, far above current levels. Mobilising private sector finance is therefore essential:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: renewables :: climate change :: Africa :: developing countries :: investing :: European Union ::
How GEEREF will work
GEEREF aims to help overcome these barriers by providing new risk-sharing and co-financing options to mobilise international and domestic commercial investments. It will invest in a broad mix of energy efficiency and renewable energy technologies. Priority will be given to deploying environmentally sound technologies with a proven technical track record.
GEEREF will stimulate the creation of regional sub-funds tailored to regional needs and conditions, rather than investing in projects directly. Sub-funds are envisaged for the African, Caribbean and Pacific (ACP) region, North Africa, non-EU Eastern Europe, Latin America and Asia. The focus will be on investments below €10 million as these are mostly ignored by commercial investors and international finance institutions. Corporate finance will be offered to support small and medium-sized enterprises as well as project finance
The Commission intends to put €80 million into GEEREF in 2007-2010, with a first contribution of €15 million next year to kick-start the initiative. Total initial funding from public and commercial sources of €100 million is anticipated, and this is expected to mobilise additional risk capital of at least €300 million and possibly up to €1 billion in the longer term.
Investment amounts at the top end of this range could bring almost 1 Gigawatt of environmentally sound energy capacity to third country markets, serving 1-3 million people with sustainable energy services and saving 1-2 million tonnes of CO2 emissions per year. It would also bring substantial benefits in terms of improved indoor and outdoor air quality and creation of local enterprises, jobs and income.
Next steps
The Commission has appointed Triodos International Fund Management b.v. in conjunction with E+Co, to facilitate the implemention of the GEEREF in close co-operation with the European Investment Bank, the European Bank for Reconstruction and Development, and other interested parties.
The Council, European Parliament and other stakeholders are invited to comment on the GEEREF initiative[1] and to endorse the Commission’s aim of reaching the initial funding target by mid-2007.
More information:
EU Commission: Commission proposes €100 million global risk capital fund for developing countries to boost energy efficiency and renewables - Oct. 6, 2007
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