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SPEECH/08/394
Stavros Dimas
Commissioner for Environment
"Young global leaders are key to
tackling climate change"
Meeting of Young Global Leaders at the European Parliament
Brussels, 16 July 2008
Ladies and Gentlemen,
It's a pleasure for me to speak to such a distinguished crowd of young global
leaders about what is perhaps the greatest and most urgent global challenge of this
century – climate change.
As a slightly less young global leader who has spent a considerable part of the last
few years dealing with climate change, I hope to see more young talented people
like you join these efforts. We need leaders in all walks of life to show the world not
only that climate change is a problem that can be solved, but that there are benefits
and opportunities to be gained from doing so.
I was happy to discover the innovative actions you are taking within your own
organisation. The "Earth Love Movement" you have created is a welcome tool to
help create awareness of the opportunities involved in pursuing climate-friendly
initiatives. And though some people could be misled by the title of your "Book of
Love," the examples of good practice it contains will have opened the eyes of
readers to the possibilities of doing something for the climate at low or zero cost.
The world is in strong need of more actions of this kind. The alarming projections
made by the Intergovernmental Panel on Climate Change (IPCC) in its Fourth
Assessment Report last year are all too clear. Unless we drastically reduce global
greenhouse gas emissions, temperatures are likely to soar by up to 4 degrees
Celsius by the end of this century, and in the worst case scenario by over 6
degrees.
Even the lowest increase projected would push the world's temperature more than 2
degrees Celsius above the pre-industrial level. This would take us into the danger
zone where irreversible and potentially catastrophic changes to the global
environment become far more likely.
But these changes are not inevitable. The world has a choice to make. It can either
choose a strategy of non-action that would allow climate change to continue
unabated until it reaches devastating levels. Or we can bring climate change under
control before it is too late by making a collective quantum shift towards more
carbon-efficient production and consumption patterns.
From an economic point of view there's no doubt which strategy is the better one.
Lord Stern's review of the economics of climate change estimates the costs of nonaction at between 5 and a staggering 20% of global GDP annually. This is many
times the cost of the policies and measures that would prevent dangerous climate
change.
To succeed in bringing climate change under control, a global effort is required.
Last week's agreement among G8 leaders on the need to cut global emissions by at
least 50% by 2050 was welcome progress, but this is only a first step. We cannot
wait to take action. What is needed is a comprehensive and ambitious international
agreement with concrete measure in the short- and medium-term and with clear
reduction targets for developed countries for 2020.
It is largely thanks to Europe's leadership that negotiations on such an agreement
are now well under way. At the Bali conference last December, the EU succeeded
in convincing other Parties not only to start these negotiations and to agree to an
ambitious roadmap to guide them, but also to conclude them at the end of 2009 in
Copenhagen. The importance of this process cannot be overstated if we are to
avoid a crippling environmental and economic burden on future generations.
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Developed nations should lead by example. The European Council of March 2007
set out the European Union's leadership vision clearly for the world to see. The EU
committed to two new targets for reducing EU emissions from 1990 levels by 2020.
The first is a cut of 30% that is conditional on other developed countries committing
to comparable efforts under the future global agreement. The second is a reduction
of at least 20%, independently of what other countries do.
To achieve these targets, concrete actions are needed that will change the relative
prices of goods and incite behavioural and technological change in favour of a lowcarbon economy. The economic benefits are obvious, and this is even more the
case with today's high energy prices. The economic impact of rising oil prices can
only be efficiently addressed by structural measures that make Europe less
dependent on fossil fuels. The targets agreed by the European Council will cut
Europe's oil and gas imports, thereby increasing energy security and reducing our
import bills. They will make our economies more energy efficient, develop
alternative sources of energy and provide the basis for the deployment of new
technologies.
An ambitious EU climate policy will also stimulate economic growth and job creation
through innovation in what are important markets for the future: wind turbines,
carbon capture and storage, smart grids, distributed generation, efficient cars, solar
heating and cooling, and passive houses. Using resources and energy efficiently is
essential for Europe's future competitiveness.
The climate and energy package of legislative proposals that the Commission put
forward in January is intended to implement the targets set by the Member States.
Central to the package is a revamp of the EU's emission trading system (ETS), the
largest such system in the world. The ETS sets a price on CO2 emissions by
granting allocations to all companies and setting a cap for emissions in line with the
EU's greenhouse gas reduction targets. This allows companies to decide whether
they reduce emissions or pay for reductions in other companies by buying
allowances.
EU emission trading has been a pioneer in harnessing the power of the market to
incentivise cuts in carbon emissions. It is a key tool for achieving emission
reductions most cost-effectively. Since its launch in 2005 the ETS has rapidly
established itself as the main driver of EU climate policy. We have learned a lot in
that time and now we are proposing to strengthen the system and make it more
efficient.
Let me highlight some key aspects of our proposal:
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First, we are helping the market to set a clear long-term carbon price by
reducing the total cap on emissions year-by-year up to 2020 and beyond.
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Second, by widening the scope of the system to other gases and sectors we are
creating new abatement opportunities which should lower costs.
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Third, we are moving towards a truly European market, with common rules for
companies wherever they are located. This will increase the cost-efficiency of
the system and reduce the risk of market distortions.
EU emission trading should be the central pillar of an international network of
trading systems leading to a global carbon market. This will play a central role in the
international climate agreement and the EU has therefore already started a dialogue
with countries and regions that are in the process of setting up similar emission
trading systems.
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Putting a price on carbon can give a major boost to emerging eco-technologies.
Take carbon capture and storage, for example, which the European Commission
strongly supports. EU leaders have already called for up to 12 demonstration plants
using this technology to be built by 2015. Our January package takes an ambitious
and positive approach to supporting these projects. It offers a clear regulatory
framework to ensure public confidence and provide legal certainty for operators,
while leaving it to the market to decide when their full scale application will be
desirable.
Another key component of the package concerns the share-out among Member
States of emission cuts in the sectors that are not covered by emissions trading.
These are in particular the housing and transport sector, agriculture and forestry,
waste management and small businesses.
To reduce emissions from these parts of the economy– which means more than
half of total emissions - we are proposing a fair distribution of the effort among
Member States, based on GDP per capita. This differentiation leads to national
emission targets for 2020 ranging widely from reductions of 20% for the wealthiest
Member States to an emissions increase of 20% for the poorest. Thanks to this
approach poorer Member States will have room to continue growing their
economies but will still need to keep their emissions below 'business-as-usual'
levels. EU-wide, emissions from these sectors will be cut by 10% below 2005 levels.
The Commission's proposals will go much of the way towards achieving the target
set by EU leaders of cutting overall emissions by at least 20% of 1990 levels by
2020. However, they also allow for this to be scaled up automatically and
proportionally in line with the higher reduction target that we hope will be agreed by
developed countries. This means we are fully prepared for making an emissions cut
of up to 30% by 2020.
Once agreed upon by Council and the European Parliament, which I hope will
happen by early next year, the climate and energy package will reaffirm EU
leadership in view of the UN negotiations. By implementing the most ambitious set
of climate and energy targets anywhere in the industrialised world, the EU is
demonstrating to our partners that making the deep emissions cuts necessary to
avert dangerous climate change is fully compatible with continued economic growth
and prosperity. This is a vital message if we are to succeed in rallying all countries
behind a global agreement.
The climate and energy package will create conditions for increased innovation and
investment in cleaner technologies. This opens up great opportunities for
entrepreneurs to gain a "first mover advantage" in developing and marketing the
solutions that will be in increasing demand in an ever more carbon constrained
world. The environmental sector contributes over 2% of the EU's GDP and this
figure is bound to increase. And as I have already mentioned, implementing the
measures in our package is essential for safeguarding sustainable economic growth
and improve energy security. It is estimated that the package will reduce the EU's
energy imports by 50 billion Euros per year by 2020. These estimates were made at
a time when oil prices were expected to be 61 dollar per barrel, the benefits are
likely to be much lower still if today's prices around 140 dollars are maintained.
Let me conclude,
Climate change has the potential to redraw the face of our planet. To prevent this
we must redraw our economy to make it sustainable. The Commission's climate and
energy package represents a major step towards creating a low-carbon, highly
energy-efficient economy that opens up vast opportunities for Europe. Our
proposals are also a major contribution to a future global climate agreement. This is
the big prize that Europe must stand together in fighting for.
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