reducing the climate change bill

Juan Delgado
As stated in the Stern report, "the benefits of strong and early action far outweigh the economic costs of not acting" against climate change. The EU has taken the world lead in developing policies to fight against climate change. Such policies must not only be effective in achieving their targets but also cost-effective in this task. The design of internal EU and international climate change policies and the extent to which other countries will join the EU in implementing climate policies
more » ... imate policies determine the magnitude and the distribution of the costs of fighting climate change. Early, effective and cost-efficient policies are crucial to achieving the objective of keeping future temperature changes below two degrees celsius. This implies the concentration of efforts in two areas: n Reducing greenhouse gas (GHG) emissions should be the main focus of climate change policies. A functioning carbon market should be the central element of such policies. Any other complementary instrument such as the use of renewables or the setting of standards should be designed in order to contribute efficiently to the main goal. n A broad post-Kyoto international agreement involving as many countries as possible should be sought. Its guiding principle should be common but differentiated responsibility. The European Commission recently proposed a new regulatory package to reduce carbon emissions by 20 percent, increase the share of renewables to 20 percent of the energy consumed and achieve a 10 percent share of biofuels in total transport fuel consumption. The European Commission proposal substantially improves the design of the EU Emissions Trading Scheme (ETS) and increases the sectoral scope of carbon mitiga-tion policies. However, the proposal fails to establish priorities between the objective of emissions reduction and the target for renewables (and biofuels). This implies that reaching this renewables (and biofuels) target might become, at some point, an obstacle rather than an instrument to reduce GHG emissions. A clear prioritisation of targets and measures is necessary in order to make the main target-ie a reduction of GHG emissions attainable. A priority item on the EU agenda is to come up with the design of a post-Kyoto agreement that manages to attract as many countries as possible and is, in particular, sensitive TGAE GB.indb 220 28/04/08 12:10:32