“EU CLIMATE CHANGE POLICY:IMPLICATIONS FOR IRELAND”

29 SEPTEMBER 2008

OVERVIEW

• BACKGROUND

• JANUARY ‘07 ENERGY & CLIMATE CHANGE PACKAGE

• KEY UNCERTAINTIES

• IMPLICATIONS FOR IRELAND TO 2020

• IIEA REPORT

EU POLICY IS TO:“prevent dangerous anthropogenic

interference with the climate system….”1992)

UNFCCC, 1992

“…limiting global mean temperaturerise to + 2° Celsius on pre-industrial levels”.

EU, 1996

BY

SCIENTIFIC CONSENSUS IS THAT:

Stab level(ppm CO2-eq)

Global Mean temp.increase

at equilibrium (ºC)

Year CO2 needs topeak

Year CO2emissions

back at 2000level

Reduction in 2050 CO2emissions compared

to 2000

445 – 490 2.0 – 2.4 2000 - 2015 2000- 2030 -85 to -50

490 – 535 2.4 – 2.8 2000 - 2020 2000- 2040 -60 to -30

535 – 590 2.8 – 3.2 2010 - 2030 2020- 2060 -30 to +5

590 – 710 3.2 – 4.0 2020 - 2060 2050- 2100 +10 to +60

2006 = 433 PPM CO2-eq!!AND

+2.5 PPM PER ANNUM!!

CAN THE EU POSSIBLY ACHIEVE ITS TARGET?

PERFORMANCE• 1997 KYOTO: -8% BY 2012

• THE EUROPEAN CLIMATE CHANGE

PROGRAMME:

– MAIN ACHIEVEMENT IS EU ETS

– ENERGY PERFORMANCE OF

BUILDINGS

– EFFICIENCY OF ELECTRIC GOODS

– PROMOTION OF CHP & BIOFUELS

EU/US Emissions Tre

4500

5000

5500

6000

6500

7000

7500

1990 1995 2000 2006

year

US

EU27

“THE EU IS ON TRACK TO MEET ITS KYOTO COMMITMENTS”EEA, 2008

OVERVIEW

• BACKGROUND

• JANUARY 2007 ENERGY AND CLIMATE CHANGE

PACKAGE

• KEY UNCERTAINTIES

• IMPLICATIONS FOR IRELAND TO 2020

• CONCLUSIONS

AN ENERGY POLICY FOR EUROPEJANURARY ‘07

(2º TARGET)

RENEWABLESCONSUMED

=20%BY

2020

GHG

20-30%On 1990

EUETS

REFORM

2020 2020 2012

cut

�Target(2005)

GDP %EU Av.

P/C GhgTonnes

EU -10 100 10.5

Ire -20 139 17

De -20 122 11.4

UK -16 117 10.9

Ger -14 110 12.1

Pol +14 50 10.5

Bul +20 33 9

“DOMESTIC SECTOR”:SELECTED EMISSIONSTARGETS

“DOMESTIC SECTOR” = 59% OF EU EMISSIONS (INC. AGRICULTURE, TRANSPORT,WASTE, LIGHT INDUSTRY, CONSTRUCTION AND SERVICES)

EU ETS SECTOR

• = 41% OF EU EMISSIONS

• EU TO SET CAPS AND DISTRIBUTE

PERMITS

• AUCTIONED PERMITS PROGRESSIVLY

INTRODUCED

• INCLUSION OF OTHER GASSSES (PFC)

AND SECTORS (AVIATION)

EU ETS SECTOR EMISSIONS

0

500

1000

1500

2000

2500

2005

2007

2009

2011

2013

2015

2017

2019

Year

Series1

RENEWABLES

• 20% TARGET SHARED FROM

49% (SW) to 10% (ML)

• FLEXIBILITY: TRADE IN

GAURANTEE OF ORIGIN

• INTERIM TARGETS (25% BY

2012)

• BIOFUELS: 10% TRANSPORT

FUELS CONSUMED 2020?? EU RENEWABLES: 8.5% IN 2008

OVERVIEW

• BACKGROUND• JANUARY 2007 ENERGY AND CLIMATE

CHANGE PACKAGE• KEY UNCERTAINTIES• IMPLICATIONS FOR IRELAND TO 2020• IIEA REPORT

KEY UNCERTAINTIES

• FLEXIBILITY

• CARBON SINKS

• EU ETS

• BIOFUELS

OVERVIEW• BACKGROUND• JANUARY 2007 ENERGY AND CLIMATE

CHANGE PACKAGE• KEY UNCERTAINTIES• IMPLICATIONS FOR IRELAND TO 2020• IIEA REPORT

NON-ETS SECTORS POST-2012

• GOVERNMENTIS DIRECTLY RESPONSIBLE FOR EMISSIONS FROM:- AGRICULTURE;- TRANSPORT;- BUILT ENVIRONMENT;- NON-ENERGY INTENSIVE INDUSTRY;- COMMERCIAL AND SERVICES.

• EACH SECTOR WILL REQUIRE A COST OPTAMISED TARGET AND DELIVERYPLAN

• SECTORAL DEROGATIONS WILL INCREASE BURDEN FOR OTHER SECTORS

• INCREASING RENEWABLES USE IN THESE SECTORS WILL BOTH– ASSIST IN DELIVERY OR 2020 TARGET FOR RENEWABLES, AND– HELP REACH EMISSIONS REDUCTION TARGE

DISTANCE TO TARGET

• ON -20% TARGET FOR 2020:

– BETWEEN 2.3 AND 17 MILLION TONNES(EPA 2008) DEPENDING ONASSUMPTIONS

– UPPER FIGURE GREATER THAN ALLTRANSPORT EMISSIONS 2005!

0

2

4

6

8

10

12

14

16

18

20

Domestic Agriculture Commercial Transport Purchases Shortfall

Mt C

O2e

20202020-30%

NATIONAL POTENTIAL: IIEA EXPERTANALYSIS (-30%)

47.4 Mt33.2 Mt

?

ETS Sector Post-2012• EU-ORCHESTRATION:

• TARGET SETTING NOW TOP-DOWN: UNIFORMITY ACROSS EU

• AUCTIONING:

• POWERGEN 100% BY 2013• CEMENT/ALUMINIUM SECTORS INCREMENTAL EXPOSURE• AVIATION ALSO• RULES NOT YET DETERMINED

• ETS ABATEMENT MEASURES BENEFIT EU AS A WHOLE, NOT MEMBER STATE

• ADDITIONAL ETS RENEWABLES WILL REDUCE PERMIT PRICE, NOTEMISSIONS!!

OVERVIEW• BACKGROUND• JANUARY 2007 ENERGY AND CLIMATE

CHANGE PACKAGE• KEY UNCERTAINTIES• IMPLICATIONS FOR IRELAND TO 2020• IIEA REPORT

IIEA REPORT

• AGREEMENT EXPECTED BY MARCH 2009: NO RENEGOTIATION FORIRELAND: -30% IS LIKELY OUTCOME

• CURRENT MITIGATION POLICY NOT AMBITIOUS ENOUGH

• SERIOUS DANGERS (FINES/ECONOMY DEPENDANT ON SCARCEFOSSIL FELS) FOR IRISH ECONOMY IF URGENT ACTION NOT TAKEN

• LONG TERM PERSPECTIVE NEEDED• 60-80% EMISSIONS REDUCTION BY 2050• CARBON TAX• RETROFIT SCHEMES/DESIGN STANDARDS• ELECTRIC VEHICLES• AFFORESTATION• ROAD PRICING• NEW NATIONAL CLIMATE CHANGE STRATEGY: INTERSECTORAL EQUITY• PUBLIC SERVICE REFORM

• REVENUE FROM CARBON TAX/AUCTIONED PERMITS

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