July 3, 2012 | by JÖRG FROMMANN
In search of an effective multinational strategy to combat global warming many people are looking towards Europe. The old continent can’t provide a universal model but certainly inspiration for successful climate policy.
From a purely security-policy perspective, the global climate is a high-risk factor. It does not respect national borders; it enters countries unchecked; and it does not heed any national laws. Even if there actually are striking correlations between the global mega-trends of climate change and security, the topic of this comparison is, of course, the impossibility of dealing with the global dynamic of climate change on a national level alone.
This was why the “Earth summit” in Rio de Janeiro in 1992 seemed to be the right setting for creating a truly effective treaty in the form of a framework convention on climate change, one that would do justice to the international dimension of global warming. For the first time, the international community resolved to reduce carbon emissions to a level compatible with the climate system. But after 20 years and almost as many climate conferences, the record is abysmal – moreover, there is no sign of improvement. In its “Environmental Outlook to 2050”, the OECD forecasts that around 85 percent of global energy will still be produced from fossil fuels in 2050, while renewable energies will only account for 10 percent. With world gross domestic product projected to quadruple in this period, the OECD says that we can expect global warming of between three and six degrees Celsius by the end of the century. In comparison, the G8 states have approved a maximum increase of just two degrees Celsius in order to keep the impact of climate change at least somewhat manageable.
It is certainly debatable whether the international community – or better still, the individual industrialized and emerging nations as a whole – can change course before it is too late. When it came to climate policy, there were not many signs of a team spirit at the most recent climate summits in Copenhagen (2009) and Durban (2011), where national interests continued to prevent the international community from adopting a decisive and concerted stance. Robert Costanza, director of the Institute for Sustainable Solutions at Portland State University, gives some not-so-surprising reasons for this: “The reasons for this failure are also clear: while a ‘global deal’ to reduce global carbon emissions will clearly benefit everyone in the long run,” he wrote for aljazeera.com, “such an agreement appears to fly in the face of countries' (especially developing countries) short-term economic growth goals.”
It seems that not being able to agree on what would be best for everyone is the paradoxical logic of multinational climate policy. However, the European community, which certainly knows a thing or two about how hard it can be to reach consensus on tricky subjects, is now regarded as a beacon of hope for tackling carbon emissions effectively and across national borders. The European Union Emissions Trading System (EU ETS) is one reason for this. Since the beginning of 2005, the EU has issued a fixed number of emissions certificates to companies in the 30 participating states. The “cap-and-trade” principle is of major importance in this system: the number of emissions allowances is limited, but companies are free to buy and sell them. The idea is that this will create a financial incentive for companies to reduce their carbon emissions efficiently.
EU emissions trading – a global role model?
A look at the Bertelsmann Stiftung’s Sustainable Governance Indicators shows that the participating states in the EU ETS do indeed score well compared with the OECD rates when it comes to CO2 emissions per unit of gross domestic product. Nine of the top ten countries in terms of reducing CO2 emissions belong to the ETS. (These include Norway and Iceland, which joined the ETS as non-EU member states.) Nations outside Europe, such as Japan, the USA and Canada, are only in the middle or at the end of the list. Although this indicates that European climate policy is heading in the right direction, the index does not prove that EU emissions trading is a success. On the contrary, the scheme has been criticized for various reasons. For example, the system does not include some important sources of CO2 at all (although at least airlines will join the scheme in the future). Furthermore, the EU ETS is regarded as too expensive and ineffective. Johannes Teyssen, CEO of the energy giant E.ON, goes so far as to say that the trading system has not motivated anyone in Europe to invest “even a single euro” in climate protection. In his opinion, this is because the price of emissions certificates has become so low in the meantime that there are hardly any incentives to use climate-friendly technology. On the whole, the impact of European emissions trading has been modest. CO2 emissions in the ETS sector continued to rise during the scheme’s pilot phase (2005 to 2007). And as things currently look, it seems doubtful whether the results of the second phase (2008 to 2012) will be significantly better.
Despite the scheme’s flaws, leading emissions trading experts such as A. Denny Ellerman from the European University Institute (EUI) in Florence like to describe the EU ETC as a promising pioneer project for multinational climate policy. In an interview with SGI News, Ellerman said that he mainly sees the low certificate prices as a merely temporary situation resulting from the euro crisis. He believes that an emissions trading system based on the EU model could indeed be an effective international climate policy tool. However, Ellerman pointed out on another occasion that the right sort of organizational structure would be needed to achieve this. Susanne Dröge, head of the global issues research division at the German Institute for International and Security Affairs in Berlin, also regards the lack of this type of structure as the reason why the EU ETS design cannot be used at a global level. However, she believes that the idea of linking individual national systems is “not completely unrealistic”.
The debate on European emissions trading will remain lively, partly because it will only be possible to truly assess the system’s effectiveness in a few years’ time. Nevertheless, this debate disguises the fact that Europe’s impetus in the global battle against climate change is actually found elsewhere, that is, in its comparatively comprehensive commitment to reducing global warming. Looking a little more closely at the statements on the environment in the Sustainable Governance Indicators, you can see that the European states have introduced a wide range of very different initiatives to tackle CO2 emissions. These include tax measures such as those in Sweden and Germany (ecological tax); funding incentives for electric cars in Ireland, the development of renewable energies in Norway, the creation of carbon–neutral ecological towns in Great Britain and forest protection in Finland. Although these initiatives cannot hide the flaws in the system – Europe’s comparatively low CO2 emissions are due in part to the current economic crisis and the major role played by suspect nuclear energy, for example in France, while considerable resistance, particularly by the large energy concerns, continues to prevent an even wider expansion of renewable energies – the various European climate initiatives do show that green thinking is rooted in politics and society. For a long time now, ecological awareness has no longer been limited to the LOHAS movement or the sphere of influence of Europe’s 36 green parties, but has also become established in a broad section of the middle classes, especially in central Europe.
Climate protection is expensive and requires the courage to recognize innovation potential where skeptics only perceive threats to growth. It is still a struggle to get this point of view across on the old continent, too. However, Europeans’ environmental awareness is a good breeding ground for sustainable climate policy. In the final analysis, EU emissions trading must also be seen in this light. The first cross-border system of this type has value in terms of pointing the way ahead for the future in that several states are not merely concerned with the benefits to them individually, but instead agree on a collective CO2 cap, thus leveling competitive disadvantages. Regardless of whether or not the EU ETS can now serve as a role model for a global emissions trading system, it would be good if the community-based approach of this scheme caught on. Of course, a spirit of solidarity will not save the climate alone. But complaining doesn’t help either. As global emissions are simply the sum of all individual emissions, everyone is welcome to start reducing his or her own carbon footprint.
Translated from the German by Rebecca Hudson