"The Global Climate Threat as a Challenge to the EU"
The seminar in Brussels on February 20th was arranged by the Swedish Foundation for Small Business Research (FSF), the Swedish Agency for Econimic and Regional Growth (NUTEK) and the Swedish Institute for Growth Policy Studies (ITPS), in collaboration with the Swedish Networks for European Studies.
"EU and the Struggle for a Better Climate - an inconvenient truth?" was the heading under which Dr Charles Parker, Uppsala University, Sweden. He pointed out some arguments for the EU as a global pacesetter - and some for the EU being a kind of pretender. Regarding the EU as a pacesetter, the EU certainly plays a key role in the Kyoto Protocol, the EU also has taken on ambitions for unilateral action until 2020; the 20-20-20 goals, and also has taken the lead in the push for a post-2012 global climate regime. However, there are some challenges like problems in meeting goals, in maintaining a stable coalition within the Union, and some distributional challenges. Moreover, according to Parker the US and China constitute for 40% of the climate problem, so we do have a global climate challenge. (For more info see his ppt.)
Professor Runar Brännlund, Umeå University, Sweden, took on a competitiveness perspective on the question whether the EU should take thee lead in the "Global War on Climate Change". The climate policy effects can be seen on two frontiers: within the EU and the EU vs. the rest of the world. The concept of competitiveness is not clearly defined, but Brännlund suggests that the most appropriate way to measure it is in changes in profits and value added. Brännlund underlined that high ambitions are not cost free; how much they will cost depends on the instruments chosen. He also said that harmonization of policy will create tension, yet that is what should be done both within the EU and globally. (For more info see ppt.)
Pierre Schellekens, Deputy Head of Cabinet at the Commissioner of the Environment, European Commission
Pierre Schellekens, Deputy Head of Cabinet at the Commissioner of the Environment, European Commission, commented on the "Climate Package" recently presented by the Commission. It has been drawn up for the 30%-goal, although at present focus is on 20%. What is economically justified is often not politically justified. The basic principles of the package are cost efficiency, compensation, and auctioning rights. In the short run there probably will be what can be perceived as a welfare reduction, however, acting now is cheaper than acting in the future. As always there will be winners, and there will be losers. Sub sectors that are energy intense might need a leaner race, considering global competition. The auctioning also includes "the polluter pays" in the system, which hopefully will be an incentive for efficiency. Effort sharing will be based on GDP per capita. Schellekens said he can not imagine a new global agreement not to happen; the question is rather what the level of ambition will be.
Dr Christina Olsen Lundh, Gothenburg University, Sweden, gave us the perspective of the national emission targets as a potential strain on the loyalty within the EU. One European Union Allowance (1 EUA) equals one tonne of carbon dioxide (CO2), and every member state will be given a certain number of EUAs, which can be used in the auctioning of the European trading system, where countries can buy or sell depending on if they have a deficit or a surplus of EUAs compared to their emissions of green house gas. The Burden Sharing Decision, these days referred to as "effort sharing" is based on the Principle of Loyalty, which might have implications, e g if the so called holding account of a country shows a surplus of EUAs in 2012, the country has three options: to sell, cancel, or carry over the surplus. The EUAs are means to an end - reduced emissions. So if a country performs well in this and keeps focus on the underlying end, the only sustainable alternative of the three before mentioned is to cancel the EUAs, although it might go against the principle of loyalty. (For more info see her ppt.)
From left: Charles Parker, Christina Olsen Lundh, Lars Oxelheim, Olof Johansson-Stenman
and Runar Brännlund.
Professor Olof Johansson-Stenman, Gothenburg University, claimed that there is a lack of efficiency, equity, and fairness in the EU's climate policy, and discussed the case of the emission rights. To begin with there are price uncertainties, since the rights can be auctioned to the highest bidder - or be given freely through "grandfathering". Other reasons for there not being cost-efficiency are perceived fairness, distributional/equity reasons, technical development/functioning of the market, effects on global competition, and political-economical aspects and implementation possibilities. Johansson-Stenman suggested that an implicit tax is needed in order to achieve the IPCC goal and stated that the suggested level of such a tax has generally been perceived as too high, yet it is lower than the CO2-tax in Sweden. On the to do-list of Johansson-Stenberg, we could find: eliminate the exceptions, auction the pollution rights, and consider a CO2-tax. (For more info see his ppt.)
To conclude, Professor Lars Oxelheim, Lund University and the Research Institute of Industrial Economics, Sweden, remarked that the Climate issues have never before been this high on the political agenda.
