Greenhouse 2009 Conference

Speech by Mr David Daly

Head of Delegation to Australia

Perth 23 March 2009

Good morning, ladies and gentlemen

I'm very pleased to be here today to talk about climate change on this, my first visit to Western Australia. In fact I'm still new to Australia, having presented my credentials only last month.

I should preface my talk by assuring you that we at the Delegation are really carbon neutral, we don't exactly love carbon, but then again we don't dislike it either.

I'm new to this field and do not come to you today as an expert. However, this was one of the first speaking engagements I took, in recognition of the gravity of the topic.

I'd like to kick things off with a quote for you:

The world's energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable - environmentally, economically and socially.

These words can be found in the opening remarks of the International Energy Association's World Energy Outlook 2008. Similar observations are commonplace amongst a myriad of respected international scientific institutions, think tanks and NGOs. The urgency of the climate change issue, unfortunately, does not obviate the complexities in finding a common solution. No less than 192 culturally, economically and politically diverse countries must work towards an agreed position, in an area fraught with uncertainties and vested interests at every step. Juxtrapose long time horizons with short political cycles, where the crux of an agreement lies in every country doing its bit - however that may be defined - and we start to gauge the scale of the challenge in front of us.

We are all observing the effects of climate change. In Europe, in Australia and around the world.

2 degree vision

The European Union holds an overarching vision to restrain warming to within 2 degrees Celsius from pre-industrial levels. Given the warming that has occurred so far, and the inertia in the climate system, this is an ambitious goal, but a necessary and achievable goal underpinning our commitments to emissions reductions and proposals for global abatement.

Climate change and energy package

In December 2008 the EU adopted its "climate and energy package"- the so-called 20/20/20 deal: 20% renewables by 2020, a 20% improvement in energy efficiency and 20% greenhouse gas reduction by 2020.

• An improved emissions trading system; and
• Emission reduction targets for sectors not covered by the ETS (e.g., agriculture, buildings, transport, waste).
• Other aspects of the package include
• New emission limits for passenger cars, i.e. phased in commitments of average emissions per kilometre;
• New rules on carbon capture and storage and on environmental subsidies; and
• A fuel quality directive that places obligations on fuel suppliers to produce 'cleaner' fuels and rules for introduction of vehicles and machinery that pollute less.

EU ETS

The EU ETS commenced with phase one in 2005 to 2008. This was a learning-by-doing exercise and was successful in placing a price on carbon and establishing the market. However, as you are aware, the price collapsed owing to an over-allocation of credits and lack of banking.

We're now in phase two running from 2008 - 2012, which corresponds to the first Kyoto commitment period. The scheme covers CO2 emissions from major installations performing specified activities, such as power stations, oil refineries, iron and steel, pulp and paper and cement to name a few.

A key component of the climate change and energy package was a revision of the ETS going into phase three beyond 2012:

Emissions trading is an extremely useful tool for driving emissions down at least cost to the economy, but it's no panacea. The European Climate Change Programme has been running from 2000 and includes a suite of programmes running in concert with the ETS, with the goal of identifying the most environmentally effective and most cost efficient policies and measures to cut greenhouse gas emissions. Other areas of attention include promotion of cogeneration, building efficiency standards, waste management, R&D, agricultural policy and development and deployment of renewables.

Renewables

The twin drivers of energy reform in the EU are climate change and energy security and we see renewables as a key part of the solution. As I mentioned, we have now agreed to an overall target of 20% renewables in final energy consumption, by 2020, with the burden shared amongst member states based on agreed criteria.

Diversification is a sensible goal working towards an internal EU energy market and some states will continue with nuclear power as part of the energy mix also.

The package also includes a further goal of achieving 10% renewables in the transport sector.

Carbon capture and storage (CCS)

Fossil fuels will continue to be part of the mix in the foreseeable future in Europe and around the world, so the deployment of carbon capture and storage technologies may assist us in effecting a significant slice of emission reductions. 300 million allowances from the ETS new entrants reserve will be made available to support the investments in up to 12 CCS demonstration projects and / or those demonstrating innovative renewable energy technologies. We now have in the EU a legal enabling environment for CCS, which was also adopted in December.

Of course, once integrated CCS techonogies are able to be applied on a large, commercial scale, uptake is dependent on a carbon price, or other policy and funding instruments.

Energy efficiency

Energy efficiency measures represent low cost or even net benefit options for abatement and Europe has already made considerable progress in reducing energy intensity. However, we can go much further through direct regulations and public education. For example, a new Regulation will set efficiency standards for passenger cars.

Covenant of Mayors

With more and more of the world's inhabitants living in cities, buy-in from local government is essential in making meaningful progress in mitigation. In a recent Commission initiative launched in February, 449 cities have signed the Covenant of Mayors to go beyond 20% by 2020, backed by Sustainable Energy Action Plans outlining how the goals will be met. The Commission is providing technical and promotional support. Participating cities from within the EU include Paris, Milan and London and some from outside the Union include Oslo, Zurich and Christchurch.

International negotiations

Lastly, I'd like to turn your attention to the all important ongoing international negotiations culminating in the UNFCCC (1) Copenhagen in December.

In January, the Commission released a communication outlining a set of proposals aimed at a successful conclusion to this meeting. Naturally, targets are one of the most important topics on the table. Developed countries should collectively aim to reduce their emissions by 25 - 40% from 1990 levels by 2020 consistent with a path to the 2 degree goal.

Comparability

The issue of comparability between country specific targets will be debated intensely, so we have proposed a set of criteria for the equitable distribution of the target:

• The capability to pay for domestic emission reductions and to purchase emission reduction credits from developing countries;
• GHG emission reduction potential;
• Domestic early action to reduce greenhouse gas emissions;
• Population trends and total greenhouse gas emissions.

An OECD-wide carbon market could help realise developed country targets with the greatest flexibility and least cost abatement options.

Our analysis suggests that all but the poorest of the developing countries should constrain emissions 15 - 30% below business as usual by 2020 depending on their respective capabilities.

The Communication also puts forward a model addressing mitigation and adaptation financing which might come from domestic sources, the global carbon market and of course, contributions form developed countries. We suggest the vexed issue of international aviation and shipping emissions be first addressed in the International Civil Aviation Authority and International Maritime Organisation fora, but if agreement within these organisations is not forthcoming by 2010, then emissions should be counted under national targets within the Copenhagen agreement.

US and China

Two countries stand out in aiding the success otherwise in the post 2012 agreement: China and the US. Many are rightly encouraged by the fresh stance of the Obama Administration. And while China's emissions have grown enormously, that country is taking aggressive measures in reducing energy intensity and promoting efficiency standards and renewable energy. China is vitally important in curtailing global emissions growth in the coming decades.

Australia - EU cooperation

I'd be remiss if I didn't highlight that Australia and the EU are cooperating on a number of fronts and have specific areas of cooperation spelt out under the new Australia - EU Partnership Framework signed last year. We continue to exchange views at the official and political levels and have many common positions. We both recognise the urgency of this issue; Australia too is planning an emissions trading scheme; we share concerns over tropical deforestation in developing countries; we both believe in the need for research in adaptation and mitigation and both are working towards making CCS a workable part or the solution.

I leave you with one final thought. Scientists must not despair. Without public concern and awareness, politicians will lack the courage to take sufficient measures to solve this most pressing of problems.

Climate change is a global problem requiring a global solution. Developed countries must show leadership and commit to ambitious targets.

On that note, I wish you a productive and enjoyable conference in this beautiful city. I look forward to meeting some of you over the coming days; being educated myself on these issues and hearing some Australian perspectives.

Thank you.

(1) United Nations Framework Convention on Climate Change

This page updated July 15, 2009