Climate change and the environment

At the UN climate conference in Paris in December 2015, Parties worldwide agreed to limit global warming to well below 2°C above pre-industrial levels. The EU is committed to reducing greenhouse gas emissions by at least 40% below 1990 levels by 2030, while improving energy efficiency by 27% and increasing the share of renewable energy sources to 27% of final consumption. A key mechanism in fighting climate change is the EU Emissions Trading System.

Legal basis and objectives

Article 191 of the Treaty on the Functioning of the European Union (TFEU) makes combating climate change an explicit objective of EU environmental policy.

General background

a.Global warming

Without additional emission reduction policies, the average global temperature is projected to increase by between 1.1°C and 6.4°C over the course of this century. According to the 5th assessment report by the IPCC (Intergovernmental Panel on Climate Change), it is extremely likely that global warming can be attributed to human influence. Human activities such as the burning of fossil fuels, deforestation and farming, lead to the emission of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and fluorocarbons. These greenhouse gases (GHGs) trap heat that is radiated from the earth’s surface and prevent it from escaping into space, thereby causing global warming.

b.Impacts of climate change

Global warming has led and will lead to more extreme weather events (such as floods, droughts, heavy rain and heatwaves), forest fires, water scarcity, disappearance of glaciers and rising sea levels, shifts in the distribution of or even extinction of fauna and flora, plant diseases and pests, food and fresh water shortages, intensified photochemical smog causing health problems, and migration of people fleeing these dangers. Science shows that the risks of irreversible and catastrophic change would greatly increase if global warming exceeded a 2°C rise above pre-industrial levels.

c.Cost of action versus cost of inaction

According to the Stern review, published by the UK Government in 2006, managing global warming would cost 1% of global GDP every year, while inaction could cost at least 5% and up to 20% of global GDP in a worst-case scenario. Thus only a small part of total global GDP would be required to invest in a low-carbon economy, and fighting climate change would in return induce health benefits and greater energy security and reduce other damage.

d.Adaptation to climate change

Adaptation to climate change ranges from soft and inexpensive measures (water conservation, crop rotations, drought-tolerant crops, public planning and awareness-raising) to costly protection and relocation measures (increasing the height of dykes; relocating ports, industry, and people away from low-lying coastal areas and flood plains). The EU adaptation strategy on climate change is aimed at making Europe more climate-resilient. It promotes greater coordination and information-sharing between Member States and fosters the mainstreaming of adaptation into all relevant EU policies.

Achievements

a.International climate policy

In December 2015, after more than two decades of negotiations, governments adopted the first universal agreement to combat climate change, at the 21st Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change (UNFCCC) in Paris. The Paris Agreement strives to keep the increase in global average temperature to ‘well below’ 2°C, while trying to keep it at 1.5°C above pre-industrial levels. To accomplish this goal, Parties aim to reach global peaking of GHG emissions as soon as possible, and to achieve net zero emissions in the second half of this century. Financial flows are to follow these goals. For the first time all Parties have to make ambitious efforts to reduce GHG emissions, following the principal of ‘common but differentiated responsibilities and respective capabilities’, i.e. according to their individual situations and possibilities. Every five years all countries have to renew and upgrade their climate action plans (‘nationally determined contributions’) and communicate them in a transparent way so that the collective progress can be assessed (‘global stocktake’). In particular the most vulnerable, the Least Developed Countries and Small Island Developing States, will be supported both financially and via capacity-building. Adaptation — mentioned on an equal footing with mitigation — is recognised as a global challenge; so is the importance of addressing ‘loss and damages’ associated with the adverse effects of climate change. The agreement entered into force in November 2016 after it had been ratified by at least 55 governments representing at least 55% of total global GHG emissions.

b.Efforts within the EU to combat climate change

The EU, via its 2030 climate and energy framework, has committed itself to the following goals to be reached by 2030: reducing greenhouse gas emissions by at least 40% below 1990 levels, improving energy efficiency by 27% (indicative target to be reviewed in 2020), and increasing the share of renewable energy sources to 27% of final consumption. The 2030 framework is following up the ‘20-20-20-targets’ decided in 2007 by EU leaders for 2020: a 20% reduction in GHG emissions, a 20% increase in the share of renewable energy in final energy consumption, and a 20% reduction of total EU primary energy consumption (all compared with 1990), all translated into binding legislative measures. The EU roadmap for moving to a low-carbon economy by 2050 formulates a long-term GHG reduction target of 80%.

The EU Emissions Trading System (ETS), the first and still the largest international carbon market, is a key EU policy instrument for fighting climate change. It is based on the ‘cap and trade’ principle: a ‘cap’ is set on the total amount of GHG emissions that can be emitted by the more than 11 000 installations (factories, power stations, etc.) included in the scheme. Each installation buys or receives ‘emission allowances’ auctioned by the Member States. These credits — corresponding to one ton of CO2 each — can be traded with other installations if unused. Over time, the overall amount of allowances is progressively reduced. Introduced in 2005, the EU ETS has undergone major reform since then. Following the temporary freeze of auctions of a proportion of CO2 permits (‘backloading’) and the setting-up of a ‘market stability reserve’ to counter the structural surplus of emission allowances by automatically adjusting the supply of auctioned allowances, the Commission proposed yet another reform in July 2015. Since 2012, the ETS also applies to aviation. Following massive international opposition, the EU suspended the scheme’s application to intercontinental flights, thus giving the International Civil Aviation Organisation (ICAO) time to develop and implement a global market-based mechanism (GMBM) to address emissions from international aviation.

Emissions from sectors not covered by the ETS, such as road transport, waste, agriculture and buildings, are subject to the Effort Sharing Decision, which sets binding annual GHG emission reduction targets for each Member State up to 2020. A proposed follow-up regulation, which is currently going through the legislative process, would set binding targets for 2021-2030 in order to achieve a 30% GHG reduction from those sectors, in line with a commitment by EU leaders made in October 2014. To help implement the EU’s commitments under the Paris Agreement, it is further proposed to incorporate land use, land use change and forestry (LULUCF) into the EU’s emission reduction efforts.

The Renewable Energy Directive seeks to ensure that by 2020 renewable energy such as biomass, wind, hydroelectric power and solar power will make up at least 20% of the EU’s total energy consumption in terms of electricity generation, transport, heating and cooling. In that spirit, each Member State has adopted its own national renewable energy action plan including sectoral targets. As part of the overall target, Member States are committed to providing at least 10% of their transport fuels from renewable energy sources. To reach the already agreed EU level target of 27% renewable energy consumption for 2030 the Commission has proposed to review the Directive.

Carbon capture and storage (CCS) technology separates CO2 from atmospheric emissions (resulting from industrial processes), compresses the CO2 and transports it to a location where it can be stored. According to the UN IPCC, CCS could remove 80-90% of CO2 emissions from fossil-fuel-burning power plants. The EU has set up a regulatory framework to commercialise and subsidise this new technology. However, the implementation of the envisaged demonstration projects in Europe has proven more difficult than initially foreseen, high costs being one of the main barriers.

New passenger cars registered in the EU have to comply with CO2 emissions standards. The target to be reached by the average car fleet is 130g of CO2/km for 2015 and will be reduced to 95g/km as from 2021. In order to create incentives for industry to invest in new technologies, so-called ‘super-credits’ can be used, whereby the cleanest cars in each manufacturer’s range count as more than one car when calculating the average specific CO2 emissions. A similar regulation is in place for vans, and one is under preparation for buses and trucks. To support the CO2 emissions reduction policy, information relating to the fuel economy of new passenger cars offered for sale or rental in the EU is made available to consumers so that they can make an informed choice when buying a new car. Also, fuel quality is an important element for GHG emission reductions. EU legislation aims at reducing the GHG intensity of fuels by 6% by 2020: this is to be achieved by, among other measures, the use of biofuels, which must, however, meet certain sustainability criteria.

CO2 emissions from international maritime shipping are significant, and are expected to grow considerably. While pressing for a global approach, the EU has established a Union-wide system for the monitoring, reporting and verification (MRV) of CO2 emissions from ships, as a first step towards cutting them. As from 2018, large ships will have to monitor and annually report their verified CO2 emissions released on their way to, from and within EU ports, along with other relevant information.

Following bans on chlorofluorocarbons (CFCs) in the 1980s to stop the depletion of the ozone layer, fluorinated gases are today used as substitutes in a range of industrial applications such as air-conditioning and refrigeration, since they do not harm the ozone layer. However, they may have a global warming potential of up to 23 000 times that of CO2. The EU has therefore taken measures to control the use of fluorinated gases and ban their use in new air-conditioning appliances and refrigerators by 2022-2025, thereby setting the pace for a global phase-out.

Role of the European Parliament

In response to the Commission’s proposal for a policy framework for 2030 on climate and energy, Parliament gave a strong signal, calling for three binding targets (more ambitious than those finally agreed): a reduction of at least 40% in domestic GHG emissions from 1990 levels; a 30% share for renewable energy sources in final energy consumption; and a 40% increase in energy efficiency.

Prior to the Paris climate conference in 2015, Parliament reiterated the urgent need ‘to effectively regulate and cap emissions from international aviation and shipping’, and called on all Parties to work through the International Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO) in order to develop a global policy framework for setting adequate targets before the end of 2016. Parliament favours broad-based carbon pricing and advocates the allocation of emissions trading revenues to climate-related investments. It asked for concrete steps, including a timetable, for the phase-out of all fossil fuel subsidies by 2020.

Within the context of the revision of the Renewables Directive, Parliament strove to guarantee that biofuel production is environmentally and socially sustainable and does not lead to deforestation and rising food prices (so-called indirect land use change (ILUC)). Parliament called for a limit on first-generation biofuels from traditional food-derived sources of 6% of final transport energy consumption by 2020 (as opposed to the 10% limit currently in force), and also for a rapid switch to advanced biofuels sourced from seaweed or certain types of waste.

During negotiations with the Council on fluorinated gases, Parliament advocated a complete phase-out of climate-damaging F-gases in several new sectors where safe, energy-efficient and cost-effective alternatives are available. Among other measures, a ban on the use of F-gases in new commercial refrigeration is planned from 2022.

In an update on CO2 emissions from passenger cars and vans, Parliament insisted on introducing the new UN-defined global test cycle as soon as possible, with a view to reflecting real-world driving conditions when measuring CO2 emissions.

Tina Ohliger

06/2017