European Union

On 6 March, the European Union submitted its commitments for the new global climate treaty that’s due to be finalised in Paris this December. The pledge, for a 40% cut in emissions by 2030, was one of the first to be delivered to the United Nations. It went largely unnoticed, but is remarkable, not least because Europe’s pledge was delivered not by individual states, but by the EU as a whole.

European climate change policy has long been an EU-led affair. That pan-European co-ordination makes sense because tackling climate change requires concerted international action. The origins of the joint submission lay in the Kyoto Protocol negotiations back in 1997, when EU member states secured the right to meet their commitments collectively. The protocol includes a provision that allows EU members to allocate commitments among themselves.

This arrangement turned climate policy into a rare EU success story, an example of European co-ordination and solidarity. The reallocation of commitments gave southern, and later central-eastern, European countries room for substantial emissions growth which was offset by tighter targets in countries such as Denmark, Germany and the UK.

Those arrangements were followed in 2005 by the creation of the EU Emissions Trading Scheme, the world’s largest environmental market. Covering about half of EU emissions, the ETS is the EU’s key policy tool for meeting emissions objectives – the 40% by 2030 promised ahead of Paris and an earlier commitment to a 20% reduction of emissions by 2020, both relative to 1990 levels. By the middle of the century, the EU is committed to reducing emissions by at least 80%.

The ETS is designed to meet these objectives in the cheapest possible way. Companies that find it hard to reduce emissions can buy emission allowances, or permits, from businesses that can do so cheaply and are willing to do more. The ETS also ensures that there is a price to pay for emitting carbon. As a result, Europe’s biggest emitters are now managing their emissions much more consciously. That is perhaps the most important achievement of the scheme.

The EU ETS hasn’t gone entirely to plan. There were regulatory teething problems and instances of fraud. The main problem, however, has been with the price of allowances.

Carbon prices are meant to respond to market developments, for example, if coal prices fall, the price of carbon needs to go up to curtail emissions from increased coal use. That fluctuating price should be one of the virtues of the scheme. Unfortunately, the European carbon price developed a tendency to crash. The first price collapse in 2006 was caused by countries handing out too many permits. A tighter cap was introduced, but then the carbon market was hit by the economic crisis of 2008.  As the European economy contracted, emissions fell to a point where the supply of allowances again exceeded demand.

“It’s counterproductive to saddle the economy with overly tight regulation in difficult times”

The surplus of permits is now equivalent to at least one year of emissions. The price has only kept above zero because firms can bank their surplus for use in future years. There is also an expectation that the surplus permits will, eventually, be removed from the system. However the European Commission has been slow to do so.

One reason for this is politics. The Commission was reluctant to propose measures that would require national approval and might therefore be open to sabotage by unenthusiastic member states. There was also a strong belief that the market would put things right. The Commission argued market participants would prefer depressed and fluctuating prices over the political risks associated with an uncertain emissions cap.

That is a valid point. There is a counter argument, however. Climate policy is more cost-effective if emission reductions can be moved from periods when they are costly to periods when they are cheap. In other words, it makes sense to tighten the emissions cap during an economic downturn and loosen it in boom times.

This has to be done within reason. It’s counterproductive to saddle the economy with overly tight regulation in difficult times. The carbon price can be allowed to fall, but not by as much as it would – and did – under a fixed cap.

EU leaders took a big step towards reforming the ETS along these lines when they agreed late last year to establish a market stability reserve to address the chronic surplus of allowances and deal with potential future shocks. The stability reserve was widely welcomed, but its start date is still under debate. The Commission proposed 2021, but the European Parliament wants to bring it forward to at least 2019.

In the meantime, carbon prices are likely to remain depressed, even if markets anticipate the new rules. The size and ambition of the ETS and its firm emissions targets have given the EU a leadership role in international climate negotiations. It is a role that the EU has relished and the Union has been a hugely important and often effective player in these intricate talks.

The EU will still be a central player ahead of the crucial Paris summit in December, but its claim to lead by example is being eroded. While the EU ETS is still the world’s largest carbon market, regional trading schemes in China and in California are equally ambitious in their depth and scope. They have learned from the EU ETS and avoided many of its design faults. Their carbon prices are often higher than those in the EU.

“The size and ambition of the ETS and its firm emissions targets have given the EU a leadership role in international climate negotiations”

A growing number of countries have adopted carbon targets and are legislating on climate change. A new survey by the Grantham Research Institute, in collaboration with global parliamentary groups, identified over 800 climate-related laws in the 99 surveyed countries. This includes pertinent legislation by all major emitters, including China and other emerging markets.

By several measures, the carbon ambitions of these countries are now on a par with those of the EU. China’s 2020 target is to reduce its carbon intensity – that is carbon emissions relative to its fast-growing GDP – by 40%. The EU has a much more anemic economy, so if its 2020 ambition is translated into the same metric, we find that the EU requires cuts of only about 30% in intensity terms.

The EU’s climate change objectives were strengthened in October 2014, when EU leaders agreed the 40% target for 2030. As with the 2020 goals, the new carbon target is complemented by parallel objectives for renewable energy and energy efficiency. However EU leaders have yet to decide how the emission reduction burden will be shared out among member states.

The Commission claims that the new target puts Europe “on the cost-effective track towards … its objective of cutting emissions by at least 80% by 2050.” That seems unlikely. According the proposed schedule, member states will have to reduce emissions by slightly less than 3% a year on average between 2020 and 2030. The pace then has to accelerate to over 5% a year between 2030 and 2050.

Back-loading emission cuts to such an extent might prove costly. Clean technologies like renewable energy and electric cars will be cheaper in the 2030s – assuming they enjoy sufficient support – but in sectors with long-lived capital a 5% annual emissions cut would exceed the rate at which assets are depreciated and replaced. The Commission’s proposed path may therefore require the premature scrapping of capital after 2030, an expensive prospect which could be avoided with a more proactive timetable.

EU leaders would be well advised to review their targets once more and bring climate action forward. This applies not just to the 2030 target, but also the ambition for 2020, which looks modest in the light of recent trends. The 2020 target could easily be strengthened from 20% to 30%, as EU leaders once contemplated. The start of the ETS stability reserve should also be brought forward to boost confidence in the carbon market.

Climate change involves timeframes that go well beyond policymakers’ normal planning horizons. This means action often gets postponed. The challenge for EU leaders now is to look, for once, into the long term.

 

IMAGE CREDIT: CC / FLICKR – Adopt A Negotiator

The post Keeping Europe’s climate policy on track appeared first on Europe’s World.

Parliament's International Trade Committee will hold an extraordinary meeting on 29 June in Brussels to decide whether the 116 amendments tabled to Parliament's draft recommendations to Transatlantic Trade and Investment Partnership (TTIP) negotiators should be put to a vote by Parliament as a whole, the political groups represented in the committee decided on Monday.
Committee on International Trade

Source : © European Union, 2015 - EP

Parliament's International Trade Committee will hold an extraordinary meeting on 29 June in Brussels to decide whether the 116 amendments tabled to Parliament's draft recommendations to Transatlantic Trade and Investment Partnership (TTIP) negotiators should be put to a vote by Parliament as a whole, the political groups represented in the committee decided on Monday.
Committee on International Trade

Source : © European Union, 2015 - EP

Good evening. We can start this press conference from today's Eurogroup meeting in which we have a number of issues. I will start by Greece given the urgency of its situation.

Greece

The Eurogroup today took stock of the situation regarding the programme of Greece. Regrettable to say that too little progress has been made in the talks between the institutions and Greece  That is no agreement has yet is in sight.  

Let me recall that at the basis of which we work is the agreement of the Eurogroup of 20th Feb and the statement that we agreed upon in February. In that agreement, there were two kinds of flexibility. One, we said we would allow the institutions to take into account the current economic situation in Greece and if necessary, adjust the fiscal targets and timelines considering the economic situation and the deterioration of this economic situation in Greece.

Second flexibility which we allowed was to replace measures both  fiscal measures and reforms by other measures being put forward by the greeks after having been being assessed by the institutions. So there was also flexibility within the current MoU to replace measures.

The institutions have made used of those two kind of flexibilities during their talks with the Greek authorities. But as we stand now, too little measures that have been put forward and been assessed are to be credible and serious and to be put in a new agreement. Therefore, the talks of the last weeks have not progressed.  

Today in our meeting, we sent a strong signal to the Greek authorities that it's really up to them to submit new, additional proposals in the coming days to fully engage with the institutions, within the framework of the Eurogroup statement of 20th Feb.

As of today, it is still possible to find an agreement and extend the current programme before the end of this month. But the ball is clearly in the Greek court to seize that last opportunity. We feel that an agreement must be credible. It has to be credible from the perspective of sustainable finances and economic recovery in Greece. But also it has to be credible from the point of view of the credibility of our monetary union and the eurozone as a whole. We think that it is still possible but if such an agreement is sent to the Eurogroup in the coming days we will judge it on that: the credibility both of Greece and for the eurozone as a whole.

Finally, let me again stress that time is really running out. The current programme expires by the end of this month, There are of course parliamentary procedures to consider. Therefore, very little time remains.

Cyprus and Portugal

Today we also discussed the situation in Cyprus.

We welcomed that the Cyprus programme has been brought back on track, and the prior actions have been complied with. As we have adopted a statement, which will be distributed, and I do not need to go into great detail. Let me just emphasise that we welcomed the progress and reforms in the financial sector, including the new foreclosure framework, which is an essential step towards addressing the very high level of non-performing loans in the financial sector.

Important challenges remain for the remainder of the Cypriot programme, notably to reduce the stock of arrears. This must remain a key priority.

Given the overall positive picture, we endorsed in principle the updated MoU and the next ESM disbursement). National parliamentary procedures are now underway.

We also reviewed the situation in Portugal on the basis of a debrief by the institutions on the main findings of their second post-programme surveillance mission. The IMF participated and they call it 'post-programme monitoring'. The ESM also participated it and the name is the 'early warning surveillance'. We welcomed the progress made and the expected strengthening of the economic recovery in Portugal. At the same time, fiscal and structural challenges remain, but we are confident that Portuguese efforts will be maintained,

The developments in Portugal and Cyprus, taken together with our discussions earlier this year on post-programme surveillances in Spain and Ireland, demonstrate a clear pattern of countries taking the necessary measures to turn around their economies and sparking growth. I think the success of the programme has been proven in all of these countries.

Once again I would like to commend the authorities and the people of Portugal and Cyprus for their continued efforts, in which they show ownership and commitment to reforms can clearly pay off.

Euro area economy

We had discussions on a broad range of important issues for the euro area economy.

To start off, Christine Lagarde debriefed us on the IMF's recently concluded Article IV review of the euro area. The IMF sees as we do a strengthening of the cyclical recovery underway, but this is for a large part driven by temporary factors, so we need to keep focusing on ways to increase our growth potential and to push forward structural reforms that are needed in that sense

There is broad agreement within the Eurogroup on the policy priorities identified by the Fund, namely structural reforms, appropriate fiscal policies and making sure the financial sector can fund their economies. In particular, one of the messages of the Fund is to use wisely the yields savings stemming from unusual low interest rates.  We had a discussion on this topic being prepared by the Commission and agreed that low interest rates open up a window of opportunity to consolidate public finances, invest, for example, in infrastructure and reform our economies. It is an opportunity that we must use well. We will return to this topic later in the year.

 There is substantial overlap between the Fund's priorities for the eurozone and the draft 2015 euro area recommendations proposed by the Commission - which is part of the European Semester. We endorsed these draft recommendations and we are committed to monitor their implementation over the coming years so they will be put into our working programme in the Eurogroup. We must keep the reform momentum and the Eurogroup intends to keep on pushing on concrete progress and greater ownership in this area.

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Disclaimer : The interpretation of debates serves to facilitate communication and does not constitute an authentic record of proceedings. Only the original speech or the revised written translation is authentic.
Source : © European Union, 2015 - EP

Brigadier General Franz Xaver Pfrengle has been appointed as new Mission Commander for the EU Training Mission in Mali (EUTM Mali). General Pfrengle, from Germany, takes up his duties on 28 July  2015. He will succeed Brigadier General Alfonso García-Vaquero Pradal, who had been in the position since October 2014. 

EUTM Mali assists in the reconstruction of effective and accountable Malian Armed Forces so that they are capable of ensuring the long-term security of Mali and, under civilian authority, restoring of the country's territorial integrity. To this effect, EUTM Mali delivers training to units of the Malian Armed Forces and develops autonomous training capability. The mission also  provides advice to the Malian authorities in reforming the army. 

The decision was taken by the EU's Political and Security Committee. 

Rina Services and Others
Freedom of establishment
Italian legislation requiring certification bodies to have their registered office in Italy is contrary to EU law

Best-Lock (Europe) v OHMI - Lego Juris (Figurine de jouet)
Intellectual and industrial property
The General Court upholds the registration of the shape of Lego figures as a Community trade mark

Gauweiler and Others
Economic policy
The OMT programme announced by the ECB in September 2012 is compatible with EU law

The European Central Bank is doing all it can to facilitate a successful outcome of the ongoing talks with Greece, ECB President Mario Draghi assured Economic and Monetary Affairs Committee MEPs on Monday. But he also made it crystal clear that ultimately, disbursing any further financial assistance to Greece is "a political decision that will have to be taken by elected policymakers, not by central bankers".
Committee on Economic and Monetary Affairs

Source : © European Union, 2015 - EP

The European Central Bank is doing all it can to facilitate a successful outcome of the ongoing talks with Greece, ECB President Mario Draghi assured Economic and Monetary Affairs Committee MEPs on Monday. But he also made it crystal clear that ultimately, disbursing any further financial assistance to Greece is "a political decision that will have to be taken by elected policymakers, not by central bankers".
Committee on Economic and Monetary Affairs

Source : © European Union, 2015 - EP

General : "There can be no cultural relativism where human rights are concerned," said Louis Michel (ALDE, BE) on Monday, at the start of the 29th meeting of the ACP-EU Joint Parliamentary Assembly, in Suva, Fiji. He said human rights could not be breached in the name of cultural diversity, adding that this issue was at the heart of discussions in Europe, as well as in the ACP states.

Source : © European Union, 2015 - EP

General : "There can be no cultural relativism where human rights are concerned," said Louis Michel (ALDE, BE) on Monday, at the start of the 29th meeting of the ACP-EU Joint Parliamentary Assembly, in Suva, Fiji. He said human rights could not be breached in the name of cultural diversity, adding that this issue was at the heart of discussions in Europe, as well as in the ACP states.

Source : © European Union, 2015 - EP

Nearly half of all people have failed to use streaming services from their own country while on holiday abroad. This practice known as geo-blocking is because of copyright protection. Current copyright rules date from 2001, but the European Commission will propose an update by the end of the year. German Greens/EFA member Julia Reda has drafted a report to serve as Parliament's input to the new legislation. The legal affairs committee votes on it on Tuesday 16 June. Watch it live on our website.
Committee on Legal Affairs

Source : © European Union, 2015 - EP

Greece's Alexis Tsipras with EU Commission president Jean-Claude Juncker last week

This weekend’s fireworks over Greece’s bailout were centred on a new counterproposal submitted by Greek ministers, who flew to Brussels to turn it over by hand. As the world knows by now, senior European Commission officials – acting on behalf of all three Greek bailout monitors – rejected it out of hand.

For Brussels Blog readers who want to evaluate the proposal for themselves, we obtained a copy of the new Greek plan and have posted it here (our friends and rivals at the Greek daily Kathimerini beat us to the punch, and you can read their summary here).

The most important thing to note is that, after weeks of holding out, Athens has agreed to meet the creditors’ demands on fiscal targets for this year and next year. In 2015, they’ve agreed to a primary budget surplus – revenues minus expenses when interest on sovereign debt isn’t included – of 1 per cent of gross domestic product, and 2 per cent for 2016. That’s exactly the levels demanded by creditors in a compromise plan presented to Alexis Tsipras, Greek prime minister, nearly two weeks ago.

But creditors do not believe the underlying figures in the document support those targets. One official cited the €700m Athens proposes to save next year through cracking down on value-added tax fraud as an item that fails to hold up under scrutiny.

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