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Possible carbon adjustment policies: An overview

14-04-2020

The new European Commission has announced policies to reduce greenhouse gas emissions drastically. Reaching an ambitious target for a global good – the climate – would require a common price for carbon worldwide. This however clashes with the free-riding problem. Furthermore, unilateral policies are not efficient since they lead to carbon leakages and distort competitiveness. To tackle these issues, the European Union can rely on different policies. Firstly, a carbon pricing of imports can combined ...

The new European Commission has announced policies to reduce greenhouse gas emissions drastically. Reaching an ambitious target for a global good – the climate – would require a common price for carbon worldwide. This however clashes with the free-riding problem. Furthermore, unilateral policies are not efficient since they lead to carbon leakages and distort competitiveness. To tackle these issues, the European Union can rely on different policies. Firstly, a carbon pricing of imports can combined with an export rebate to constitute a ‘complete CBA’ (Carbon Border Adjustment) solution. Alternatively, a simple tariff at the border can compensate for differences in carbon prices between domestic and imported products. A consumption-based carbon taxation can also be contemplated. Last, a uniform tariff on imports from countries not imposing (equivalent) carbon policies may help solving the free-riding problem.

Externe Autor

Dr. Cecilia Bellora and Prof. Lionel Fontagné, Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)

Carbon emissions pricing: Some points of reference

30-03-2020

The need to do more to mitigate climate change resulting from emissions of greenhouse gases (GHGs), in particular in terms of pricing, is widely accepted. Several countries around the globe are either planning to implement or have introduced carbon-emission pricing measures (i.e. taxing or internalising negative externalities), with varying scope (upstream, downstream), coverage (sector exclusions) and boundaries (subnational or national areas). The objective is to reduce emissions in line with medium-term ...

The need to do more to mitigate climate change resulting from emissions of greenhouse gases (GHGs), in particular in terms of pricing, is widely accepted. Several countries around the globe are either planning to implement or have introduced carbon-emission pricing measures (i.e. taxing or internalising negative externalities), with varying scope (upstream, downstream), coverage (sector exclusions) and boundaries (subnational or national areas). The objective is to reduce emissions in line with medium-term climate change mitigation pathways. There are broadly two approaches: the emissions trading system (cap and trade) and carbon taxing. The existing measures are assessed regularly so as to be made more effective as regards emission reductions. The number of jurisdictions having adopted or intending to adopt carbon pricing has increased but still remains limited, in particular as regards the level of emissions covered. One concern is to address 'carbon leakage', a term that describes shifts in economic activities and/or changes in investment configurations, directly or indirectly causing GHG emissions to be moved away from a jurisdiction with GHG constraints to another jurisdiction with fewer or no GHG constraints. Measures addressing carbon leakage have complementary objectives and outcomes that need to be addressed in their design. They address competitiveness and trade concerns, while their central raison d’être is climate change mitigation. They are now at the top of the EU agenda.

COP25 climate change conference in Madrid

22-11-2019

The COP25 climate change conference will be held in Madrid, Spain, from 2 to 13 December 2019, under the presidency of the Chilean government. It will focus on completing the rules for the implementation of the Paris Agreement and address a range of other issues. In advance of COP25, the European Parliament has tabled questions to the European Commission and the Council. The Committee on Environment, Public Health and Food Safety has tabled a motion for a resolution on COP25, to be voted during the ...

The COP25 climate change conference will be held in Madrid, Spain, from 2 to 13 December 2019, under the presidency of the Chilean government. It will focus on completing the rules for the implementation of the Paris Agreement and address a range of other issues. In advance of COP25, the European Parliament has tabled questions to the European Commission and the Council. The Committee on Environment, Public Health and Food Safety has tabled a motion for a resolution on COP25, to be voted during the November II plenary session.

EU Environment and Climate Change Policies - State of play, current and future challenges

15-10-2019

The 'study in focus' reviews the state of play of on-going EU environmental and climate legislation and pinpoints key challenges for the next five years. Challenges arise from the plans released by the president-elect, such as a new European Green Deal, the completion of work started in the previous term (e.g. the Regulation on a framework for sustainable finance and the completion of the multiannual finance framework), by reviews of legislation foreseen for the next term and the need for action ...

The 'study in focus' reviews the state of play of on-going EU environmental and climate legislation and pinpoints key challenges for the next five years. Challenges arise from the plans released by the president-elect, such as a new European Green Deal, the completion of work started in the previous term (e.g. the Regulation on a framework for sustainable finance and the completion of the multiannual finance framework), by reviews of legislation foreseen for the next term and the need for action where indicators show that current EU environment targets may not be achieved.

Externe Autor

Anke HEROLD, Vanessa COOK, Yifaat BARON, Martin CAMES, Sabine GORES, Jakob, GRAICHEN, Peter KASTEN, Georg MEHLHART, Anne SIEMONS, Cristina URRUTIA, Franziska WOLFF

ICAO Agreement on CO2 emissions from aviation

23-09-2019

At its 39th triennial Assembly in 2016, the International Civil Aviation Organization (ICAO) reached an agreement to tackle international aviation emissions. The first agreement of this type applying to a specific sector of the economy, its key component is the establishment of a global market-based measure to offset CO2 emissions from international aviation. Work is going on, at both EU and ICAO level, in order to have the new system operational in 2021.

At its 39th triennial Assembly in 2016, the International Civil Aviation Organization (ICAO) reached an agreement to tackle international aviation emissions. The first agreement of this type applying to a specific sector of the economy, its key component is the establishment of a global market-based measure to offset CO2 emissions from international aviation. Work is going on, at both EU and ICAO level, in order to have the new system operational in 2021.

China’s climate policies with an emphasis on carbon trading markets

10-10-2018

China has emerged as an important actor on the global stage with regards to the United Nations (UN) climate negotiations. China played a vital role in the successful entry-into-force of the Paris Agreement (PA) and has continued to show commitment to its implementation. The country has adopted a range of climate policies in order to fulfil its Nationally Determined Contribution (NDC) commitments by accelerating efforts to both improve levels of energy efficiency and to encourage a shift away from ...

China has emerged as an important actor on the global stage with regards to the United Nations (UN) climate negotiations. China played a vital role in the successful entry-into-force of the Paris Agreement (PA) and has continued to show commitment to its implementation. The country has adopted a range of climate policies in order to fulfil its Nationally Determined Contribution (NDC) commitments by accelerating efforts to both improve levels of energy efficiency and to encourage a shift away from coal energy to low-carbon alternatives. In the UN climate negotiations China continues to advocate that developed countries need to enhance their mitigation efforts and provision of financial support for developing countries. While the carbon and energy intensity targets for 2020, outlined in the 13th Five Year Plan (FYP), appear to be within reach, the recent increase in coal consumption in China has led to concerns regarding the achievement of the 2030 targets. Transforming such a vast economy and its energy system is in any case a long-term task that requires continuous political commitment and a wide range of well functioning policies across different levels and sectors. If the national Emissions Trading Scheme (ETS) is implemented successfully (learning from the experiences of the regional ETS pilots), a strong CO2 price signal (along with market reforms to the power sector) should ensure that CO2 emissions in China peak by 2030.

Externe Autor

Lina Li and Sean Healy

Partnership Instrument

19-04-2017

The EU's Partnership Instrument (PI) is a foreign policy tool established under the current Multiannual Financial Framework to fund strategic cooperation with third countries on 'issues of global concern', and pursue EU objectives set out in the Europe 2020 strategy related to sustainability, trade and innovation, and EU public diplomacy. While all third countries are eligible for PI-funded cooperation, the instrument is especially aimed at middle and upper-income countries that are current or potential ...

The EU's Partnership Instrument (PI) is a foreign policy tool established under the current Multiannual Financial Framework to fund strategic cooperation with third countries on 'issues of global concern', and pursue EU objectives set out in the Europe 2020 strategy related to sustainability, trade and innovation, and EU public diplomacy. While all third countries are eligible for PI-funded cooperation, the instrument is especially aimed at middle and upper-income countries that are current or potential strategic partners to the EU.

Climate Action and the Emissions Trading System (ETS) in China

15-09-2016

In October 2011, seven ETS pilots (Beijing, Shanghai, Tianjin, Chongqing, Guangdong, Hubei and Shenzhen) were approved by the Chinese government. Starting in 2013 and 2014, they were designed to lay the foundation for a national ETS (scheduled to start in 2017), to ensure that carbon and energy intensity targets are achieved while minimising abatement costs. The briefing outlines the key differences between the EU ETS and the Chinese ETS, the support provided to the development of the Chinese ETS ...

In October 2011, seven ETS pilots (Beijing, Shanghai, Tianjin, Chongqing, Guangdong, Hubei and Shenzhen) were approved by the Chinese government. Starting in 2013 and 2014, they were designed to lay the foundation for a national ETS (scheduled to start in 2017), to ensure that carbon and energy intensity targets are achieved while minimising abatement costs. The briefing outlines the key differences between the EU ETS and the Chinese ETS, the support provided to the development of the Chinese ETS from abroad, as well as the key challenges that lie ahead for the successful implementation of a national ETS in China.

Externe Autor

Sean Healy, Martin Cames and Felix Matthes

Main Options for a GMBM at ICAO During its High-level Meeting in May 2016

15-04-2016

In 2010, the International Civil Aviation Organization (ICAO) adopted an aspirational goal to achieve Carbon Neutral Growth from 2020 (CNG2020). Despite efficiency improvements, CO2 emissions from international aviation are projected to be seven times higher in 2050 than in 1990. At the Paris climate conference (COP21), countries agreed to limit climate change to well below 2°C. Without considerable contributions of the aviation sector to global mitigation efforts, this goal will be much harder ...

In 2010, the International Civil Aviation Organization (ICAO) adopted an aspirational goal to achieve Carbon Neutral Growth from 2020 (CNG2020). Despite efficiency improvements, CO2 emissions from international aviation are projected to be seven times higher in 2050 than in 1990. At the Paris climate conference (COP21), countries agreed to limit climate change to well below 2°C. Without considerable contributions of the aviation sector to global mitigation efforts, this goal will be much harder to achieve. CNG2020 is unlikely to be sufficient in the long term. In 2013, the International Civil Aviation Organization (ICAO) established a working group for developing a Global Market-Based Measure (GMBM), which should be adopted in 2016 and come into force in 2020. The main issues at stake at the high-level meeting are the design options of the GMBM, particularly how the offset obligation can be distributed among airlines, how special circumstances and respective capabilities (SCRC) of states can be reflected, how the target of carbon neutral growth from 2020 onwards can be achieved and how environmental integrity can be ensured through environmentally reliable offset units.

Externe Autor

Martin Cames and Hans Pulles