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Tuesday, Feb. 10, 2009

CLIMATE CHANGE SYMPOSIUM

EU looks beyond global warming to secure energy, competitiveness


Staff writer

The climate and energy policy adopted by the European Union in December is aimed not only at addressing global warming but the region's energy security and industrial competitiveness, said Christian Egenhofer, a senior fellow at the Center for European Policy Studies in Brussels.

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Christian Egenhofer SATOKO KAWASAKI PHOTOS

"It has to be understood specifically as an EU package and not as a model for the world," Egenhofer told the Jan. 21 symposium.

Still, Dian Phylipsen of energy research and consultancy firm Ecofys International suggested that EU discussions on the latest package may provide some clue as to how international talks for a post-Kyoto Protocol framework could reach an agreement.

Egenhofer stressed that the EU package "goes far beyond narrow climate change objectives." It is aimed at increasing energy supply security, ensuring the competitiveness of European industries and availability of affordable energy, promoting environmental sustainability and combating climate change, he said.

One major factor behind such efforts, he said, is the region's growing dependency on energy imports. Specifically, the region depends on Russia for 31 percent of oil supply, 33 percent of natural gas and 16 percent of coal while Middle East countries account for 22 percent of its oil demand, he noted.

Substituting fossil fuels with low-carbon fuels reduces the EU's dependency on OPEC and Russia over the long term while investments in renewable sources can reduce long-term electricity price volatility, Egenhofer said.

Leadership in renewable energy technology and greater energy efficiency would make EU industries more competitive, and the emissions trading scheme transfers some of the economic rent from OPEC and Russia to EU government coffers, he told the audience.

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Dian Phylipsen

Speaking on the prospect of international talks for the post-Kyoto framework to tackle global warming, Phylipsen, an international business developer at the Dutch-based firm, said a prevailing view is that there will likely be an agreement — maybe not this year in Copenhagen but a year later.

The agreement will have many more options and types of commitments than the Kyoto Protocol, she said. The new framework will likely include various elements such as technology cooperation and a sector-by-sector crediting mechanism, especially to ensure involvement of developing countries and emerging economies, which were not covered by binding targets under the current regime, she added.

The EU basically prefers a top-down target-setting approach to reducing greenhouse gas emissions, but it is also interested in "effective and fair contributions" by developing countries in the form of sector-based commitments, Egenhofer said.

There are different categories of sectoral approaches to climate change, including a transnational sectoral approach that would set a global energy efficiency benchmark at sectoral levels. But currently, there is a lot of interest in a bottom-up sectoral approach, whereby countries like China, India, Brazil and Mexico develop voluntary actions and unilateral commitments, he said.

Phylipsen said talks within the EU on the region's climate change policy since the late 1990s "may be an international negotiation in miniature form."

The EU has had differences among its member states in energy resource availability, competitiveness of industries and in the level of their economic development, she said.

In the discussions leading up to the 2008 policy, EU members were roughly divided into three main groupings of countries, according to Phylipsen.

The first group was the low GDP per capita countries — mostly new member states in Eastern Europe — that relied heavily on coal for energy. The second group comprised countries like Italy, Spain and Austria that lagged behind their Kyoto Protocol targets. And the third group was the front-runners that had unilaterally announced more ambitious targets of their own, she said.

"All of these groups had something in the EU package" that took into account their conditions, Phylipsen said.

Many of the various elements that might play a role in future international agreements came into the European discussion, including the carbon market element, international funding and support for innovative renewable energy technologies, she said.



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