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Ambassador Scharioth Presents Latest G8 Climate and Energy Policy Agreements at Annual Energy Efficiency Forum in Washington, DC
Ambassador Klaus Scharioth spoke at the US Energy Association's 18th Annual Energy Efficiency Forum at the National Press Club on June 13, highlighting how Germany is using its presidencies of both the EU and the G8 to push for solutions to the "twin challenges" of climate change and energy security. He outlined the agreement reached by leaders at the G8 Summit in Heiligendamm, calling it "a watershed for climate and sustainable energy policy." Ambassador Klaus Scharioth on the Topic of Dave Myers, Thank you for inviting me to address the 18th US Energy Efficiency Forum. It is a great honor and pleasure to be with you today and exchange ideas and insights on this extremely timely subject. My remarks will be in three parts: First, I will make the argument that combating climate change is urgent, worthwhile, and feasible; Second, I wish to brief you on the results of the meeting of the G8 leaders in Heiligendamm; and Third, I would like to explain the climate and energy strategy of the EU. My first thesis is this: Energy security and climate change are among the greatest challenges of the 21st century. It is important to understand that these two challenges are deeply linked and that they are examples of mutual interdependency. People around the globe depend on each other for finding common, sustainable solutions; there are no isolated solutions. Population growth, urbanization, economic boom in Asia and elsewhere – all these factors, taken together, will increase energy demand by over 50 per cent by the year 2030 in comparison to 2004. Energy demand is the major driving force of global warming. Scientists around the world agree: humankind is responsible for the current process of climate change. The energy sector currently accounts for 60 per cent of global greenhouse gases. The IPCC (Intergovernmental Panel on Climate Change) has made clear: allowing climate change to continue unabated would have grave consequences for the environment, for our economies, and for our security. According to a recent study presented to the German Government (by the German Advisory Council on Climate Change, titled: Climate Change as a Security Risk), climate change will overstrain the adaptive capacities of many societies, thus leading to growing instabilities around the world. This does not need to happen if we take action now. There is a window of 10 to maybe 15 years during which we must succeed in reversing the rise in greenhouse gas emissions. To avoid a dangerous climate change, global emissions must be halved by 2050 relative to 1990 levels. The good news is that, according to recent studies, this is economically affordable and technologically feasible. The costs of investing in climate protection are far lower than the costs of inaction. The Stern Report estimates that economic losses through climate change could reach 20 per cent of global GDP if no action is taken, while the cost of taking immediate action would amount to about 1 per cent of GDP. The message is clear. We simply cannot afford to do nothing. Leaving behind a healthy planet for our children without devastating floods, droughts, hurricanes, and rising sea levels is not just a moral obligation. Limiting global warming also makes good economic sense. Business leaders have already recognized the benefit of investing in climate protection and energy conservation. They are securing their place on the markets of the future. Climate change and the growing price of energy resources are going to shape the future of the global economy. Environmental technologies and, in particular, innovative energy technologies are the key to global growth markets, the markets of the future. The consulting firm Roland Berger predicts that in Germany alone sales from these technologies will rise from € 150 billion today to € 1 trillion by the year 2030. But the market alone will not deliver the substantial reductions in greenhouse gas emissions needed. Business leaders are ready to act but they are also calling on policymakers to provide planning security. At a time of high oil prices and scarcity of resources, energy security is becoming increasingly important. Combating Climate Change through energy efficiency and use of renewable energies increases our energy security. Both the U.S. and the EU are greatly and increasingly dependant on energy imports. A large portion of the energy we consume comes from less stable regions. The perceived scarcity of resources is leading to the greater involvement of state companies and governments in the international energy markets – the top 8 oil producing companies are state owned. The EU and U.S. are working together to find and implement the strategies needed to combat climate change and increase energy security. But Europeans and Americans cannot reverse alone the continuing global trend in energy consumption or rise in emissions. Nor can we insulate ourselves from its effects. We also need to engage China, India, as well as the other countries with emerging economies. At the same time we have to respect that the people there have the same desire and right to enjoy prosperity based on economic development. Germany has therefore taken the opportunity of its EU and G8 presidencies to push for solutions to the twin challenge of climate change and energy security. At the EU-US Summit on April 30, 2007 the US government and the EU member states committed to several actions including the EU-US Energy Star Agreement or advanced clean coal technologies to name just a few.
G-8 Agreement of Heiligendamm The agreement reached in Heiligendamm was a watershed for climate and sustainable energy policy. Heiligendamm brings us two major steps forward. Secondly, G-8 leaders gave an important signal. They agreed to develop a common, long-term goal for greenhouse gas reductions. As an indication for the level of ambition, they will seriously consider at least cutting emissions in half by the year 2050. This long-term goal would provide the much-needed planning security for investors, carbon markets, and the upcoming climate negotiations. You will be pleased to hear that G-8 leaders recognized energy efficiency as the fastest, most sustainable, and cheapest way to reduce greenhouse gas emissions and enhance energy security. Measures to increase efficiency should be developed and implemented in national energy-efficiency programs. These measures can include international standards and labeling, economic incentives, and voluntary agreements (para 65). They identified specific sectors where the G-8 will take action:
Now the major challenge is to build on these agreements by developing concrete ambitious measures.
What are we doing in the EU? Within the EU, we took fundamental decisions in early March 2007 on an integrated climate change and energy strategy - "integrated" because one is not possible without the other. The strategy also outlines the EU’s proposals for a global and comprehensive agreement to combat climate change after 2012, when the Kyoto Protocol targets will expire. The EU has made a firm unilateral and independent commitment to achieve a 20 per cent reduction of greenhouse gas emissions by 2020 relative to 1990 levels. Twenty per cent is an ambitious goal, and huge efforts will be required. However, the heads of state and government went even further: They committed their countries to a reduction by as much as 30 per cent over the same period, provided that other developed countries and economically more advanced developing countries also do their part. Germany is prepared to contribute by cutting its emissions by 40%. The groundbreaking European Emissions Trading System based on mandatory caps, has matured and become the major instrument for reducing greenhouse gas emissions in the EU. With the ETS the EU has succeeded in placing a price on CO2.. It was decided to strengthen and expand the ETS, thus giving the business community the necessary planning security. The EU ETS is now the biggest international trading scheme and a key pillar of the fast-growing global carbon trading markets. The value of traded volume to date is estimated at $18.86 billion. The ETS shows that emissions trading can be done. But if CO2 emissions are to be significantly reduced on a global scale, then such an emissions-reducing system would need to operate at the global level. That is why a global carbon market needs to emerge from the current discussions. Capping and trading greenhouse gas emissions is necessary but not sufficient. It is clear that these goals can only be attained through a significant modernization of our energy policy. That is why the European Union adopted not only the objectives for climate protection but also a comprehensive energy action plan. Without efforts to increase energy efficiency and the use of renewable energies, the EU would not be able to achieve more energy independence or its self-imposed climate goals. At the heart of the action plan are four groundbreaking targets that we want to reach by 2020:
Just as we reached agreement together, so we will take a joint, fair approach when it comes to translating the European goal into national targets. We will take account of member states' different starting points and potentials. The difficult discussion within the EU bears some similarity to the global North-South discussions. What we do within the EU, to some extent, might serve as a model for a global system. Since we are at the meeting of the Energy Efficiency Forum, I would finally like to mention that the EU has decided to initiate a new international agreement on energy efficiency to develop common global efforts to promote energy efficiency. The proposed agreement would focus on promoting energy efficiency worldwide and could include various areas of cooperation such as regulatory cooperation, information exchange on energy-saving strategies, methods of measurement, and research cooperation on energy-efficient technologies. Germany will promote this effort within the G-8 plus framework as well. Conclusion This December, the members of the UN Framework Convention on Climate Change will meet in Bali, Indonesia. This will be the next important step toward an international climate change regime. In Bali, we want to begin comprehensive negotiations on establishing a binding framework agreement for the period after 2012. One thing is clear: Europe and the U.S. have to move forward together. Only in this way will we be able to persuade the countries with emerging economies, in particular China and India, to share responsibility for the future. Let there be no misunderstanding: if we don’t succeed in agreeing on a post 2012 regime, this would be a disaster our children would not forgive us. Anyone who demands cooperation from others must also set an example. The EU and the U.S. should therefore keep the issues of energy security and climate protection at the top of their joint agenda. Links
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