Carbon Market Watch

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Media Advisory: Announcement of EU climate pledge for UN climate deal may undermine 40% domestic climate target by 5%

25 Feb 2015

The EU is expected to sign-off on its official international climate pledge – the so called Intended Nationally Determined Contribution (INDC), with an announcement on 6 March at the next meeting of the EU’s Environment Ministers.

This announcement will make the EU the first region to flesh out its pledge following the Lima UNFCCC meeting. In doing so, it will kick off a wave of contribution announcements from countries over the course of the year which will build momentum towards the Paris agreement set to be delivered in December.

Ahead of the 6 March meeting, a number of important events are planned:

  • Tomorrow, 25 February, the European Commission will on release a paper as part of a wider set of documents with the collective title of the “Energy Union Package”.
  • As part of that package, the EC will outline it’s vision for the Paris agreement and will offer a perspective on what could be  in the European intended nationally determined contribution under the heading “A blueprint for tackling global climate change beyond 2020.” This is not, however, the final INDC as it needs to be agreed and discussed by national environment ministers.
  • The EU’s climate pledge will be based on the EU 2030 climate and energy framework, including an “at least” 40% greenhouse gas reduction target.
  • The final INDC will be brokered on the basis of two separate draft INDCs that have been prepared by the Latvian Presidency and the European Commission.

However, there are in particular two key issues that remain controversial and could significantly weaken the 40%:

1. Inclusion of land use and forest management could reduce climate target by up to 5% 

The way land use emissions are addressed in the EU’s emission reduction target will be critical because the land use sector does not only contribute to emissions, it also removes carbon from the atmosphere. Some EU Member States, notably Finland, Ireland, Poland and Germany have  to include rules on land use and forest management that could reduce the headline figure by as much as 5%, as suggested by a leaked memo from the German government, meaning that the real impact of the EU’s efforts would be no more than 35%.

However, given that heads of states agreed to “at least” 40% emission reductions, allowing the land use sector to compensate for reduction obligations in other sectors would not be in line with the political decision that has already been taken. It would also be seen as “backsliding” from the originally presented 40% target and would set the EU off on a bad start towards agreeing on an ambition international climate treaty in Paris in December 2015.

To avoid this situation, the EU must be clear that it will address emissions from LULUCF, but in such a way that it does not undermine the integrity of the overall target. Emissions and removals from LULUCF sector must be treated separately and on top of the EU’s ‘at least’ 40% domestic target. This sends the right signal to other countries as they prepare their INDCs. Some principles for how the EU should include LULUCF in its climate policy are laid out in a briefing by NGOs.

2. Allowing the linking of Emissions Trading Systems could undermine domestic nature of EU’s climate target

Although the ‘at least’ 40% GHG target was clearly presented as a domestic target, the current INDC drafts are ambiguous on whether the EU’s climate target allows for the use of international carbon markets.

The reason for this is that there is no unanimous EU position amongst the European Commission and Member States on the role of international carbon markets, e.g. some countries still want to use international offsets on top of their 40% domestic share but there is no agreement amongst the EU’s Member States to increase the 40% target with international offsets.

Another reason within the 40% GHG target is that the current EU Emissions Trading System covers several jurisdictions, including Iceland, Liechtenstein and Norway. The EU is currently also discussing linking its EU ETS with Switzerland.

However, using allowances from other jurisdictions outside of Europe to count towards the 40% GHG target would effectively allow “foreign” allowances inside the EU and undermine the domestic nature of the EU’s climate target. This is also problematic because to date the EU does not have safeguards for the linking of emission trading systems to protect the EU’s carbon market from offsets entering and being laundered through other ETS systems.

Contact

Please feel free to contact us if you are interested in additional background information or reactions in the course of these developments.

Eva Filzmoser
Director, Carbon Market Watch
eva.filzmoser@carbonmarketwatch.org
+ (32) 499212081