Europe to call for cuts in emissions of developing nations at Copenhagen

The European Commission has confirmed its position that developed countries should be achieving greenhouse gas cuts of at least 25-40% by 2020 relative to 1990, and 80-95% by 2050. And it believes advanced developing countries should be making serious emission reduction commitments.

In the opening salvo ahead of the post-Kyoto Protocol climate change talks in Copenhagen, the EU’s Communication also calls for a more stable global carbon market to reduce costs of compliance, and increase funding to meet reduction targets.¹

The communication says the bloc should reach out to other countries, both developed and later developing nations, "to ensure an OECD-wide market by 2015 and an even broader market by 2020".

At the heart of EU strategy is the bloc’s 20/20/20 December climate package measures (ENDS Reports 407, pp 4-5  and 408, pp 40-41 ). The bloc believes its new 20% unilateral target and its 30% target by 2020 relative to 1990 - dependent on similar commitments by other major emitters - will give it poll position at Copenhagen.

The main uncertainty remains the US, but the EU is optimistic it will yet be an ally at Copenhagen. Environment Commissioner Stavros Dimas has written to President Obama welcoming proposed emissions targets and a huge emerging cap-and-trade scheme (see pp 48-49 ) offering major opportunities for cooperation.

But the document has been criticised for its vagueness on funding, which is a crucial pillar for global agreement. An early draft suggested developed countries buy their carbon allowances at a fixed price, potentially yielding over €160 billion for developing nations, but this was dropped in the published version.

Launching the communication on 28 January, Mr Dimas warned no agreement was likely without funding, particularly for developing countries: "No money, no deal".

Yet a watered-down later version ahead of the Spring Council seen by ENDS has specific references to funding mechanisms removed altogether.

Even so, the communication estimates a global investment of €175 billion by 2020 is needed in clean technologies. More than half of this would be needed in developing countries, where another €23-54 billion will be needed annually by 2030 for adaptation programmes.

Mr Dimas said that linking of the EU emissions trading scheme with other cap-and-trade schemes would enhance stability and efficiency of the global carbon market, raising much of the €175 billion needed by 2020 for clean technologies.

As to the key issue of emissions reductions in developed countries, the report suggests four factors to take into account to ensure the burden is fairly spread. Annual contribution to reductions could be based on GDP per capita, equating to ability to pay for domestic reductions or buying international credits, or by emissions per unit of GDP, equating to carbon intensity of the economy.

Two other measures could include trends in emissions between 1990 and 2005, taking into account early domestic action, and emissions relative to population trends over this period.

The communication takes a hard line on the need to extend commitments to deep emissions cuts from developed countries to more advanced developing countries within the OECD such as Mexico and Korea. It says their emissions should be held to 15-30% below business-as-usual.

The EU wants all but the poorest developing countries to develop national "low-carbon development strategies" by 2011 in which profitable or low-cost ‘no lose’ options are paid for domestically by private sector or household funds, potentially boosted by government contributions.

It offers the prospect of "external" financial assistance for additional cuts beyond domestic resources through a "Facilitative Mechanism for Mitigation", which would provide appropriate support based on technical assessments, subject to "robust and verifiable low-carbon development strategies".

From 2010-14, the Commission proposes a Global Climate Financing Mechanism for poorer developing countries, aimed at raising €1 billion a year, but offers no details.

But a key proposal of the document is to phase out or at least reform and heavily restrict the Clean Development Mechanism. This gives industrialised countries international offset credits for sustainable development projects in developing countries but the document intends to restrict this to all but the poorest developing countries and gradually move to national emissions caps by 2020.

Christian Egenhoffer of the Centre for European Policy Studies says countries such as China, India and Mexico would get credits for going beyond domestic "no lose" measures in sectoral targets. Credits would be harder to achieve once low-hanging fruit are denied to the CDM, but would be genuinely additional to business-as-usual domestic measures.

Professor Saleem ul Huq, senior fellow on climate change at the International Institute for Environment and Development believes reform of the CDM "is doable" once developed country commitments on funding remove distrust.

Even so, there is concern that uncertainty over the future role of private investors given likely tighter restrictions on the CDM and new sectoral targets in key developing countries could hamper investment.

These generalised proposals will now be discussed in more detail at the Environment Council on 2 March, and at the European Council on 19-20 March.

They will form part of wider UN discussions under the Bali Action Plan on long-term commitments to reductions and a new global agreement (ENDS Report 407, pp 6-8 ) at the meeting of the parties to the Kyoto Protocol and climate convention in Bonn during March.