Report by Nicola Creighton, Feasta (The Foundation for the Economics of Sustainability)
I attended the UNFCCC meeting in Bonn for three days (14-17 May) of the second week of the meeting, my brief being to glean information on the views held by various parties on the EU-ETS as it prepares to enter its second phase (2008-2012) and to network for the Cap and Share Campaign, conceived by a number of people within Feasta energy and climate group but run separately. There were about 1800 people at the meeting, which was the 26th session of the Subsidiary Body for Scientific and Technological Advice and the Subsidiary Body for Implementation of the United Nations Framework Convention on Climate Change. I attended most of the third session of the Ad Hoc Working Group on Further Commitments for Annex I (i.e. industrialised countries) Parties under the Kyoto Protocol, which was held from 14-18 May.
Focus of the meeting
It was clear after the first day of attending some of the plenary events and some of the side events that the focus was on achieving some basic consensus on the 2 degree celsius limit among the several hundred countries represented in advance of the next meeting in Bali in December, on ‘fine-tuning’ the CDM and JI (Clean Development Mechanism and Joint Implementation) and trying to pin down some plans for post-2012. There was a strong focus on what technological advances can/may achieve and the importance of knowledge access and technology transfer for developing countries. There were, in addition, recurrent carefully-worded statements from numerous developing countries to the effect that the rhetoric of all these things was leaving the real problem out of focus: lack of resources, insufficient funding to implement the necessary plans and projects and reach the crucial targets.
Missing discussion on price signals
I was surprised at the somewhat naïve level of some of the presentations: there was plenty of warmed-up material on energy efficiency and renewables. Until the price signals are right, much of that simply won’t take effect in any serious way. So a discussion on how to get to the right price signals would have been apt but was conspicuously absent, if called for by several parties. Getting those signals would of course involve a stringent cap, EU-wide first (the EU unilaterally proposed 20-30% cuts by 2020), then globally – the elephant in the room.
A representative from a Dutch company gave a presentation on energy-saving lightbulbs, what it meant for his company to come into the market as a challenger and what ruses they had had to think of to make business sense of the matter. A side event on market mechanisms focused on the need to create a stable carbon price and addressed a range of issues on the supply and demand sides of the emerging carbon market. Also discussed at that side event was the difficulty of measuring sustainable development benefits and of verifying emissions reductions. This was the only place these things came under discussion – elsewhere it seemed taken for granted that such measuring and verification would look after itself. There was much ‘should’ and ‘ought’ speak throughout, in an effort to compensate, I assume, wherever there was real lack of consensus. Australia is still going its own way and the Canadian government is busy fudging targets and baselines (20% by 2025, ran a recent government headline, but perplexingly from a 2006 as opposed to a 1990 baseline).
General consensus on EU-ETS
CAN (Climate Action Network) was present and vocal. I attended one of their meetings and met Tomas Wyns, their new EU-ETS expert from Brussels and briefly also Matthias Duwe, their European head. I got special permission to be an observer at one of their meetings (which are otherwise always closed). I spoke with several of their members (inlcuding an American who is in contact with the Wuppertal Institute vis-à-vis research into linking US emissions trading schemes with that of the EU) about emissions trading and their response was the kid-glove approach: wherever there are schemes running, don’t touch, it’s good we’ve got them at all. As for ETS, the widely-held view ran, it’s just having teething problems and will be fine with a few modifications. I explained to one person after another that the problems were of a systemic nature and not just incidental mishaps or glitches, giving examples all the way. But while they agree that there were windfall profits going to the major polluters in the first round, they retain a piety about the scheme that beggars belief.
Overall cap required
Tomas Wyns (CAN’s new EU-ETS expert) was a little more sceptical, but only a little. He sees the problems the lack of an EU-wide cap cause (i.e. the fact that with each country more or less setting its own target with the National Allocation Plans, the Kyoto targets won’t ever be met) and tells me CAN-Europe are lobbying for such a stringent overall cap as opposed to each country setting its own. He shares our concern with the buy-out facility that CDMs represent and is also pressurising to have more stringent limits put on that loophole.
[ECO, the CAN daily publication, ran a short but hard-hitting satirical article on the ludicrous nature of some of the criteria for the CDM. It seems you could illegally clear a forest in a developing country, come back a few years later with a project, supported by a developed country, to reafforest the same area and use that project to claim credits. All you would have to show would be lack of any intentionality re getting credits when you cleared the forest in the first place, and intentionality is notoriously difficult to prove or disprove.]
Back to ETS: Wyns is not against a downstream emissions trading system per se and on the issue of who should administer the revenue, he is happy enough to leave that to governments. I get the impression CAN would be satisfied with minor modifications to ETS rather than fundamental changes. Pat Finnegan of GRIAN suggested that there should be an Irish wing of CAN and to the extent that CAN actually gets quite a bit of recognition from the policy-makers and can be vocal and given a platform at such events he is right. But I suspect Feasta would cause a schism within CAN from the outset with our much more radical ideas for reinventing ETS.
Deutsche Bahn – a clear ally for Cap & Share
I met a representative of Deutsche Bahn, Constantin Vogt, who was well-up on DB’s energy sources, ETS and noise pollution (which incidentally is proving as much of a headache for them these days as ETS). More than half of DB’s energy comes from coal and they actually own some power stations, which means that although the kind of power they are generating is not the same as that for domestic or most industrial use, they still fall in the ‘industry’ category and need permits, unlike other transport (so far anyway). So they fight a losing battle against heavy-polluting air and road transport, struggling to open even one new route a year, while Ryanair clocks up a half-dozen or more. Plus, as Brian mentioned there is the fact that there is no tax on kerosene. But as one of the CAN papers points out, it is not illegal in the EU to tax kerosene, it would just have to be done and with the right measures in place, could be done, including avoiding planes simply fuelling elsewhere.
Vogt is in close contact with Peter Westenberger, Head of Environmental Policy at DB’s Environment Centre (and whom another member of Feasta met in Berlin recently) and was keen to see and hear about Feasta’s ideas on ETS. He is eager to stay in contact and will I think support C&S and promote our ideas at DB. He sees too, though, that Germany is in a peculiar situation regarding disadvantage from ETS: the situation in some other countries e.g. France is quite different, as their rail network gets its power mostly from nuclear.
Hans Diefenbacher, whom I had wanted to meet, was not at the meeting but said I could meet him in Heidelberg – too far a trek to undertake during such a short stay. Monica Alessi of the Centre for European Policy Studies was there for only one day, in the first week, but she has given me contact details of their ETS expert.
