European Union plans tough efficiency targets

The European Union is working on one of the most ambitious plans ever to reduce energy waste in its economy. A draft plan - a Green Paper - which emerged last week, aims to slash 20% off the energy consumption level of 2005 by 2020. Instead of growing by 0.6% a year, primary energy consumption in the EU could be reduced by 0.9% a year through the use of existing technologies and in a cost-effective way, the paper says.

This reduction would cut energy consumption by 360 million tonnes of oil equivalent and yield financial savings of €60bn per year. This target would have to become part of Europe's competitiveness drive - the so-called Lisbon strategy. It would also greatly help achieve long-term climate policy plans.

The main tools which the paper envisages to achieve these EU targets are tax breaks and state aid to promote cleaner products and services. In the transport sector, the main tools to promote the use of the most efficient cars are fiscal incentives (tax breaks) and green pricing adjustments.

However, harmonising taxation in the European Union is notoriously challenging - and may become even more difficult as a consequence of the results of the referendum on the Constitution in France, which may slow down European integration. So the paper says that smaller groups of willing member states - as opposed to the whole trading block of 25 countries - should be encouraged to go ahead with harmonised policies.

Other measures reccomended by the paper include encouraging companies to include a percentage of energy efficient cars in their fleets. In addition, toll road charges could be differentiated according to the efficiency of cars that use them.

In the buildings sector, the paper reccomends considerably strenghening existing legislation on the minimum performance of buildings.

The target in the paper resembles a proposal that environmental group WWF has been pushing for years. The European Commission faces both internal and external opposition to the setting of stringent targets on efficiency, as has been the case during the debate on a Directive on Energy End-Use Efficiency and Energy Services, currently under discussion.

The draft green paper is available on the website of Environment Daily, the European publication that first obtained the draft.

leaked draft Green Paper (contains some French-language text)

WWF's "Energy Efficiency Challenge" paper (PDF)

New York conference to discuss US carbon caps

The drama on regulation of climate change in the United States will be opening off Broadway next month. Leading players in energy and the environment will meet in New York City to weigh in on the multi-state energy initiative known as the Regional Greenhouse Gas Initiative.
The complex plan is being discussed by states' representatives, power companies, large electric consumers and environmental organizations. It will place a cap on emissions of carbon dioxide from power plants in several US states - from Maine to Delaware. It was devised in reaction to the decision by the US federal administration not to ratify the Kyoto Protocol and by a desire of state representatives to start moving ahead - given that inevitably in the future there will have to be some form of regulation of greenhouse gases. Many companies also prefer to have regulatory certainty (see an earlier story on Duke Energy asking for a carbon tax).
The plan is expected to be unveiled some time this summer. Among the contentious issues under discussion are the type and level of the cap, the time period for phase in, the nature of the trading program. Stakeholders are also discussing "leakage", the potential for a shift of dirty power production to other parts of the country that are unregulated, and whether more solutions should be sought from efficiency, trimming demand, or constraints on the supply side.

For more information on the NY conference:

CleanAir-Coolplanet Website

European carbon prices go up

Carbon prices have been rising sharply since the European emissions trading scheme was launched at the start of this year, reaching a record closing price of €19 a tonne yesterday, the Financial Times reports.
Under the emissions trading scheme, the amount of carbon dioxide - a gas that causes climate change - that industries can emit is capped. Companies that use less than their allowance can sell their excess permits.
The paper quoted Margaret Beckett, UK secretary of state for the environment, as saying that emissions trading would boost the City of London, which has become an international centre for this emerging business.
A senior associate at the law firm Baker and McKenzie added that London has developed one of the biggest concentrations of expertise [on] greenhouse gas emissions trading. Many of the contracts are based on English law, and already the City is working on some sophisticated financial products around carbon, he added.
Read article here (for subscribers):

Financial Times website

British companies see threats and opportunities from climate change

Most British companies expect to have to consider climate change issues in 2005, a report published by research organisation Article 13 said yesterday. British businesses are taking climate change very seriously, both as a potential commercial opportunity and a risk factor that could affect their markets, the report said.

A third of the companies surveyed said there would also be a crucial opportunity arising from climate change. "Any company that can contribute to a low-carbon economy has an opportunity," said one company representative.

Climate Change and Poverty: A Business Opportunity

Cars get bigger and heavier..

The Financial Times reported that European car manufacturers reduced CO2 emissions from new cars last year at only half the rate needed to meet their voluntary energy efficiency commitment for the European market. Provisional figures for CO2 emissions from new cars show the European industry produced an average efficiency of 160 grams per kilometre last year, down only 1.8% on the previous year. To meet the target of 140g/km by 2008 the carmakers need an annual rate of improvement of 3.3%.

In a separate press release, Jos Dings, the Director of European environmental group Transport & Environment said, “Since the agreement was made in 1998, the car industry has been putting most of its effort into marketing bigger, heavier, more powerful cars...Rather than living in denial about its failure, the industry should support calls for a legally binding, flexible and transparent system that gives real incentives for manufactures to achieve the 120 g/km target. This target is essential for Europe to meet its climate objectives and to reduce its EUR 100 billion per year dependency on oil imports.”

WHAT CAN I DO? Well, a lot, in fact. Chose a more efficient car, use it only when needed, do car-pooling (more people in one car), walk more and use more public transport (it keeps you fit as well!). Even better, write to your politicans demanding better efficiency standards.
If you are in the US, you can write letters to politicians:

Union of Concerned Scientists

Find out more about chosing an efficient car here:

Database of cars and fuel efficiency (including miles per gallon figures)

If you speak French, German, or Italian, try this excellent consumer site

TopTen website

But what's going on behind the scenes in the US?

Interesting radio program on the fact that environmentally conscious investors are starting to use the power of their purses to force corporations and Wall Street to address the issue of climate change. "Living on Earth" host Steve Curwood talks with Mindy Lubber, president of the organization Ceres, about efforts to use nearly $3 trillion in assets from large pension funds as a carrot and stick to prompt industry to cut back on greenhouse gas emissions..

Listen to the show here:

Listen to the show

US to reject UK climate measures

The US will not agree to UK measures to tackle climate change, due to be discussed at the upcoming G8 summit, a US presidential negotiator has said. Tony Blair had hoped the US would agree to more investment in low-carbon technology and agreement on emissions. However, President Bush's chief climate negotiator, Harlan Watson, has told the BBC that the US will not commit to re-shaping its economy to "incentivise" firms to use new low-carbon technology, he said.
Read the whole story:

BBC News

Read a related story:

Reuters

WHAT CAN I POSSIBILY DO? You could:

Sign the People's Ratification of the Kyoto Protocol!

Ecological debt and the G8 - Editorial

As the July G8 summit approaches, the UK"s New Statesman magazine publishes a provocative editorial by Andrew Simms in its latest issue.

A few highlights:
"It is rarely understood this way, but climate change is really a problem of debt. Not a cash debt, but an ecological one. Environmentally, we're living way beyond our means, spending more than the bank of the earth and the atmosphere can replace in our accounts. It is this debt - not the hole in the nation's public spending plans - that ought to have been the subject of the election campaign. And it is this debt - not the financial debts of poor nations to rich - that should guide the thinking of the Chancellor and other western leaders as they approach the G8 summit in July."

"Even the Financial Times commented that the IMF "probably ruined as many economies as they have saved". Yet we still expect poor countries to repay most of their debts, despite the effects on their people's lifestyles. Rich countries, faced with ecological debt, will not even give up the four-wheel-drive school run."

"The widening global gap in wealth was built on ecological debts. And today's economic superpowers soon became as successful in their disproportionate occupation of the atmosphere with carbon emissions as they were in colonial times with their military occupation of the terrestrial world. Until the Second World War, they managed this atmospheric occupation largely through exploiting their own fossil-fuel reserves. But from around 1950 they became increasingly dependent on energy imports. By 1998, the wealthiest fifth of the world was consuming 68 per cent of commercially produced energy; the poorest fifth, 2 per cent."

Read the whole article (pay per view)

Businesses urged to list climate risks

By Fiona Harvey, Financial Times
Companies came under pressure to disclose the risks to their businesses from climate change yesterday as leading institutional investors called for tough action. A group of 26 institutional investors with more than $3,000bn in assets urged the US Securities and Exchange Commission to force companies to disclose the risk as part of their securities filings.
Risks to companies include rising sea levels, regulated reductions in carbon dioxide output and greater variability in the weather. The group, including the states of California and New York, the Teamsters Affiliate Pension Plan, the London pensions funds authority, also pledged to invest $1bn in the next year in companies with technologies to combat climate change. Fiona Harvey, New York

Pension funds face climate-change risks, says report

IPE.com
UK- The pensions industry needs to recognise the long-term impact of climate change and adapt their asset and liability management strategies accordingly or they face an uncertain future, according to a report by UK merchant banking group Climate Change Capital.
The report ‘Impacts of climate change on financial institutions' medium to long term assets and liabilities’ argues that current financial models and assumptions do not adequately budget for climate change, leaving investments exposed to “significant” risks in the long term.
It also says that climate change might influence the obligation on trustees and fund administrators to be prudent investors and suggests that the definition of their fiduciary duties be extended to incorporate climate change and related issues.
Pension funds will face risks such as “direct physical impact “ on assets; while catastrophe reinsurance and insurance claims will worsen, the study says.

Read the rest of the article

Climate Change is Risk and Business Opportunity - Swiss Re

The insurance industry believes climate change represents a huge risk for its sector but a business opportunity as well, Christopher Walker of Swiss Re told an audience of public health experts at the Harvard Medical School today.
Mr. Walker’s lecture concentrated on climate change as a financial issue from the point of view of the insurance and reinsurance industry’s potentially rising costs and risks. Carbon is becoming a tradable commodity, allowing companies to hedge their risks, profit from emissions assets and turn this new discipline into a competitive advantage, he said. Walker added that the insurance industry can be a facilitator of emissions reduction activities, acting as a catalyst for the development of renewable, emission reduction and energy-efficient technologies.
Swiss Re also aims to reduce its own greenhouse gas emissions footprint through improved energy management in its buildings and through the promotion and use of resource-preserving energy systems such as renewables, he said.

More on the Harvard lecture

Europeans Rate Environment As Important As Economy

Environmental policy is equally important to economic policy for 85% of European Union citizens, according to a new survey issued this week in Brussels, the capital of Europe. Even more, 88% of them, think environmental concerns must be taken into account by politicians when they formulate economic policy, the poll found.
The Eurobarometer survey updates a 2002 poll, and incorporates for the first time views in the ten new member states of the 25-country trading block.
The areas of greatest concern to the European public are water pollution, man-made disasters such as oil spills,
climate change and air pollution.

European Commission Press Release