EC Says European Business Must Lead Move to Low-Carbon Economy

November 30, 2007 // Published as a news service by IHS

The group, part of the European Commission (EC), was set up to be a blueprint for how European policy issues can be designed in an integrated manner. This is done by bringing key stakeholders together before the EC finishes its proposals.

Therefore, the group contributes to increased transparency of the policy-making process and better regulation, plus it paves the way for more robust policies by the EC.

At the conference, the group prepared a series of messages to be conveyed at the upcoming meeting of the U.N. Framework Convention on Climate Change (UNFCCC), which starts in Bali on Dec. 3.

According to the group, the UNFCCC meeting needs to deliver a roadmap that engages businesses through a new platform to reach an international climate change agreement by 2009. This agreement should enable international action to stabilise the global temperature increase at around 2°C within this century.

The group's key messages for the UNFCCC meeting are as follows:

• Climate change is a global issue - Energy accounts for 80% of all greenhouse gas emissions worldwide and must receive priority attention in addressing climate change. The European Union (EU) has recognised the opportunity for early action and is taking the political lead. But neither the EU nor the industrialised countries alone can achieve success in the fight against climate change.
  
  This will demand action by all major emitting countries, in line with the principle of common but differentiated responsibilities and respective capabilities. It is recognised that a range of different mechanisms will be needed to enable different countries and actors to engage.

• Engagement of business in the solution is vital - It is business that will have to develop more sustainable products and services. And it is business that will act in the massive deployment of low-carbon and energy-efficient technologies, requiring major investment in all countries and the significant transfer of private investment to developing economies. Business is willing to act, but it is up to public authorities to create conducive market conditions.

• Collaborative action is needed - Business, governments and nongovernmental organisations (NGOs) are uniting in Europe to take action. This inclusive approach needs to be adopted worldwide to increase the effectiveness of mitigation and adaptation strategies.

• There is urgency to act now - Science tells us we urgently need to address the climate change issue. The opportunity to act is now, as investment cycles are entering an important phase of capital stock renewal and expansion.
  
  New investments in energy supply globally are estimated at about €15 trillion over 2005-2030; this represents a huge challenge but also an opportunity to deploy the best low-carbon technologies.
  
  Emphasis should be placed on deploying cost-effective solutions and avoiding technology lock-in. Deepening of the global carbon market will be essential.

• International industry sectoral agreements offer a way forward - Such agreements could encourage technology and diffusion of best practices, thereby accelerating action globally.
  
  In light of the limited time for action and with a view to progressively developing a global carbon market, both industry and governments should endeavour to develop appropriate sectoral approaches as part of a post-2012 solution.

• Businesses and NGOs are willing to act - But there is a need at the international level for a platform to facilitate interaction between governments and these key stakeholders. This would enable more rapid development and implementation of productive solutions in technology, adaptation, mitigation and risk management, as well as financial and investment flows.
  
  Such an effort could facilitate the delivery of an integrated approach to climate change and energy security. Addressing climate change is not just a discussion about the environment - it must also cover the relevant trade, finance and competitiveness issues.

Günter Verheugen, EC vice president responsible for enterprise and industry policy said, "Tackling climate change requires a varied, integrated approach, which addresses the triple goal of competitiveness, energy and the environment. European leaders have made clear that Europe intends to lead the move to a global low-carbon economy. The opportunity is to be technology leader and therefore technology supplier in the future. Taking action now can give European businesses an advantage over others, so they manufacture the safest and cleanest products, which the world is waiting for.''

Over the past two years, the High Level Group on Competitiveness, Energy and Environment has studied the functioning of energy markets, the EU Emissions Trading Scheme, the long-term energy future for Europe, drivers for investment in power generation and energy efficiency, and ways to provide the right framework for industry to adapt to the energy and climate change challenges.

For more information, see the web site for the High Level Group on Competitiveness, Energy and Environment.

Source: European Commission.