In the run-up to the Climate Change Conference in Copenhagen (COP15), Europe has revealed the nuts and bolts of measures that it intends to propose to counter global warming. Obama's America is sending out conciliatory signals, light-years away from the position adopted by the Bush administration, and the cooperation of emerging economies still hangs in the balance. On Saturday 5 September, in the course of a meeting of G20 finance ministers, the Asian tiger economies led by India and China, refused to enter into any firm commitment. However, Brussels, which remains undaunted, has continued to move forward in a bid to lead by example — first and foremost by establishing a timetable for anti-global warming measures, and by providing details of the budget required to implement its policies.
The timetable is part of a 33-page communiqué, which has yet to be officially made public, that the European Commission intends to present for debate by the European Council on 10 September. In the wake of the G8 Aquila summit agreement on a 2.5°C cap on global temperature increases over the next ten years, European authorities believe that "the time has come to break the deadlock by presenting a plan to finance anti-climate change measures that will optimize the chances of a successful conclusion to the COP15 meeting in December." As many commentators have pointed out, "the snail's pace" of ongoing negotiations on the issue is not to the taste of the European Union, whose leaders pride themselves on leading the charge to save the ecology of our poor beleaguered planet.
The Commission's experts are therefore proposing a gradual introduction of funding, which should result in the spending of 100 billion euros by 2020. The plan makes it clear that funding will be sourced from "cash flow and not by direct spending on the part of public authorities." The idea is to achieve the objective with finance provided by three categories of resources: charges on public and private stocks and bonds in member states, charges on the sale of CO2 quotas on the emissions market, and from the worldwide movement of public finances.
In view of its potentially lucrative character, the Commission considers funding from private investment to be one of the key points of its strategy. The challenge of global warming will require a solid programme to build infrastructure in richer partners to the agreement and, a fortiori, in developing countries. Brussels further takes the view that offering member states the possibility of deducting emissions reductions that they have financed in priority zones from their overall emissions volumes is an important incentive.
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The CO2 emissions market will also play a crucial role. The Commission aims to finance at least part of the plan to achieve the 2020 emissions goals with profits generated by carbon credit trading. In establishing an emissions reduction target of 30% (which Europe has promised if other countries accept a cut of 20%), Brussels believes that the carbon finance market could generate approximately 38 billion euros per year. However, the thorny question of who is to directly foot the bill remains a major problem, particularly in view of the current recession. The Council has already established two possible criteria: a contribution based on the quantity of greenhouse gas emitted and another based on countries' ability to pay.
A choice will have to be made, and all the indications are that the the solution will be a compromise between the two possible systems to be implemented in time for the first progress report in 2013, which is the year when the future Copenhagen agreement should come into force. Forecasts for the 2011-2012 period indicate that global spending on the reduction of greenhouse gases and structural interventions in energy supply and demand will range from 4 to 7 billion euros. In the following year, this figure should increase to 10 billion euros. The bill to be paid by Europe will amount to 1.1 billion euros, if is based on the quantity of emissions, and 3.26 billion euros if it is based on ability to pay. According to one of our sources, these values define the range for negotiation, and the final figure will be situated somewhere in between. It remains to be seen if parties to the future climate change agreement will remain steadfast in their willingness to accept sacrifices to safeguard the future of the planet. Other issues, and they include the billions that will have to be spent, will present only a minor obstacle, if everyone agrees on a common direction for public policy.
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