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Climate change package to enhance growth and jobs



A Commission package to fight climate change and promote renewable energy, demonstrating targets agreed last year are technologically and economically sound, provides a major opportunity for businesses.

A Commission package to fight climate change and promote renewable energy, demonstrating targets agreed last year are technologically and economically sound, provides a major opportunity for businesses.

Measures announced on 23 January 2008 are intended to increase use of renewable energy dramatically in all EU Member States and set legally enforceable targets for individual governments to achieve them. All major CO2 emitters will be given an incentive to develop clean production technologies through a thorough reform of the emissions trading system (ETS) that will impose an EU-wide cap on emissions. Other measures include an emissions-reduction target for industries not covered by the ETS as well as new rules on carbon capture and storage and on environmental subsidies.

This package supports the Commission call to the Council and European Parliament on 10 January 2007 български (bg)czech (cs)dansk (da)Deutsch (de)eesti (et)ελληνικά (el)español (es)Français (fr)Gaeilge (ga)italiano (it)latviešu (lv)lietuvių (lt)magyar (hu)Malti (mt)Nederlands (nl)polski (pl)português (pt)română (ro)slovenčina (sk)slovenščina (sl)suomi (fi)svenska (sv) to approve an independent EU commitment to a reduction of at least 20% in greenhouse gas emissions by 2020 compared with 1990 levels and a 30% reduction by 2020 subject to a new global climate-change agreement; and a mandatory EU target of 20% renewable energy by 2020. This strategy was endorsed by the European Parliament and by EU leaders at the March 2007 European Council [212 KB] [3].

“Our mission is to provide the right policy framework for transformation to an environment-friendly European economy and to continue to lead the international action to protect our planet,” says Commission President, José Manuel Barroso. “Our package holds the right answer to the challenge of energy security and is an opportunity that should create thousands of new businesses and millions of jobs in Europe.”

“This package demonstrates to our global partners that strong action to fight climate change is compatible with continued economic growth and prosperity,” adds Environment Commissioner Stavros Dimas. “It gives Europe a head start in the race to create a low-carbon global economy that will unleash a wave of innovation and create new jobs in clean technologies.”

The new proposals target a more environment-friendly Europe with the goal of capping global temperature increases at 2°C. They will also help create a more industry-, jobs- and consumer-friendly EU. The Commission hopes to see the package adopted by the end of 2008.

Building on the ETS

Building on the ETS, the Commission proposes to strengthen the single, EU-wide carbon market which will now include more greenhouse gases than just CO2 and involve all major industrial emitters. Allowances will be reduced year-on-year to ensure emissions covered by the ETS will be reduced in 2020 by 21% from 2005 levels.

The power sector – responsible for the majority of EU emissions – will face full auctioning from the start of the new regime in 2013. Other industrial sectors, as well as aviation, will step up to full auctioning gradually – although exceptions may be made for sectors particularly vulnerable to competition from producers in countries without comparable carbon constraints.

Revenues from auctioning could amount to €50 billion a year by 2020, according to the Commission. Member States will be able to use these revenues to help the EU adjust to an environment-friendly economy by supporting innovation in renewables, carbon capture and storage, and R&D. Part should also help developing countries adapt to climate change.

Effective instrument

The ETS is in its fourth year and has proved effective in providing incentives for cuts in greenhouse gas emissions. At present, the system covers some 10 000 industrial plants across the EU – including power plants, oil refineries and steel mills – accounting for almost half the Union's CO2 emissions. Under the new system, over 40% of total emissions will be covered by the ETS; to reduce the administrative burden, industrial plants emitting less than 10 000 tonnes of CO2 will not have to participate.

In sectors such as building, transport and waste not covered by the ETS, the EU will reduce emissions to 10% below 2005 levels by 2020. To achieve this, the Commission is proposing a specific target for each Member State to reduce or, in the case of new Member States, increase emissions up to 2020.

All Member States will also have to start changing the structure of their energy consumption. Today, the share of renewable energy in the EU is 8.5%, which means that an average increase of 11.5% is needed to meet the 2020 target. The Commission is proposing individual, legally enforceable targets for each Member State as options for developing renewable energy vary from one state to another and lead times for bringing renewable energy on stream are long.

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