WWF EU Blog

A recent report[1] commissioned by the Polish Chamber of Commerce (PCC) and big players in the power and mining sectors[ii] claims that if Poland were to contribute to an EU goal of 80% greenhouse gas reductions by 2050, the costs in 2030 could amount to 22 billion PLN (€5.3bn) per year, about half of their profit. The implication is that climate policy will be a drain on the economy and government should apply the brakes.

Digging into the analysis reveals what has been ignored in coming to this conclusion: the wellbeing of Poles. No account is taken of the tremendous health benefits from cutting coal pollution, the cessation of coal imports and subsidies, or of the economic boost the economy would experience by investing in growing sectors like renewable energy and efficiency.

Coal pollution imposes huge costs on society

Moving away from fossil fuels leads to a reduction of the externalities[iii] of conventional energy, such as the cost of public health care, water treatment, forest diseases and reduced yields. For every kilowatt hour of energy produced in Poland, where the average price for households is about 0.60PLN (€0.15), the dependence on coal leads to 0.80PLN (€0.19) of external costs[iv].

In 2009, the European Environment Agency (EEA)[v] estimated the external costs of the biggest Polish power plants and industrial plants at 45-79 billion PLN (€11-19bn) per year. These losses well exceed those attributed to annual climate policy costs in the PCC report (13 billion PLN, €3.1bn). The number one polluter in Europe is the Belchatow

Power Station and number ten is Turow power plant. In 2009 they imposed a cost on Poles of between 9 and 16 billion PLN (€2.2-3.9bn) in external costs. Both facilities are owned by one of the sponsors of the PCC report, the Polish Energy Group PGE.

Coal power is supported by imports and subsidies

The lack of appropriate climate policy reduces the Polish energy security and continues import dependency. Polish coal imports have grown each year since 2008, and in 2011 reached around 15 million tonnes[vi].  The PCC report does not refer to the subsidies the coal sector receives from the state budget. In 2010 alone, the value of these subsidies amounted to about 2.8 billion PLN (€680m). Although mining is historically important to Poland, the industry is now smaller than the internet/web economy, which has reached 3% of GDP[vii].

The PCC report has questionable legitimacy

The methodology and research assumptions of the PCC report have not been published, so there is no substantive basis to verify the calculations, which should therefore be treated with caution. EnergSys’s expertise in conducting economic studies has been criticised in the past[viii]. Their previous[ix]  report on 2030 climate policy and the impact of proposed EU low carbon regulations on the Polish economy and energy sector presented estimated costs of climate policy drastically different from all other macro-economic analysis on this topic (World Bank, European Commission, Institute of Structural Research). The costs presented by EnergSys were four times higher than those from the World Bank, for example[x].

It is a substantial coincidence that the claims presented in the PCC report conform entirely to the interests of the large corporations who want to maintain an outdated, centralized energy system. Climate policy would contribute to the development of distributed energy, based on local renewable energy resources, which would threaten the dominant market position of centralised coal producers.  The report is a blunt lobbying weapon which overlooks anything but the narrow interests of a small group.

There is another Poland trying to emerge from the smoke

The PCC report ignores the benefits of innovation to improve the economy through the development of innovative distributed energy. Climate policy is an opportunity to create hundreds of thousands of new jobs in small and medium enterprises operating in the renewable energy and energy efficiency sectors.   For example, a recent report[xi] on thermal renovation efforts and the labour market shows the potential to create 250,000 net new jobs.

Now is the time for Poland to invest in the clean energy economy, building new opportunities and saving money while protecting its citizens from health risks.In Poland’s renewables sector, the increase of Installed wind power in 2010 in Poland was 455 MW, nearly doubling national wind capacity.[xii]. The Gdansk shipyard has changed its production profile and now off-shore windmill pylons are a core business, at the same time conserving jobs[xiii].   In solar heating, the Polish company Watt is producing highly efficient collectors sold the world over [xiv]. The company is increasing its capacity, creating more jobs.

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A common sport at COPs is watching the EU struggling to talk to anyone except themselves as they endure endless rounds of internal coordination. When push comes to shove in the final negotiations, they are often so inward focused that they are caught flat-footed.

Durban looks like risking a repeat of this pattern, with potentially dire consequences for a final agreement. Indeed it is perhaps more serious than ever, as it is the EU leadership itself, the Polish presidency, that is the main troublemaker.

Poland is insisting on full carryover of ‘hot air’ AAU excesses beyond 2012. This could slash real reduction effort in the second commitment period by almost 5 Gt at the global level. Other EU Parties want the opposite approach: a complete ban on carryover. Obviously cancellation of hot air would be the most responsible approach. But there are options, including those being floated inside the EU delegation, which could yield a compromise formulation that retains environmental integrity.

EU negotiators are mandated to propose a solution to the hot air issue in these negotiations, as an essential part of agreeing to CP2. Not fixing hot air could well mean Europe can’t agree to extend the KP, which would unravel the whole conference.

After months of positioning itself as willing to accept an extension of the KP in exchange for a roadmap on a future deal, it would be the height of irony if the EU itself explodes the whole delicately balanced negotiations. It would make their performance in Copenhagen look like a brilliant success.

Poland’s role here is clear. It is the EU leader, and it is responsible for ensuring the EU can negotiate firmly to achieve its main aims of a mandate for a future agreement, a second period of Kyoto, and implementation of the Cancun agreements and Bali action plan. It should stop stubbornly insisting on its own parochial interests and get on with the job it is meant to do.

The potential shift in the Chinese position about the nature of a future climate deal has had everyone at the Durban COP analysing what they meant – was it just legally binding but without obligations for them? Was it an idea with no text backing it up, and so simply a promise to consider it in the future? Predictably, the press cycle has gone from initial enthusiasm, to reports some are sceptical because they don’t see the follow up.

One would hardly expect crystal clarity from China now – this is a negotiation after all, and cards are held close to the vest. Further, all of this focus on China, and the reactions from the EU and the US, has deflected attention from other parties, who by all rights ought to be in well in the spotlight – namely Japan, Canada and Russia.

The Kyoto shipjumpers are trying to keep out of the wind whipping up around the ‘big three’, and hoping they can sail through this conference unnoticed, without picking up any kind of future obligation.

In Durban they’ve been saying in harmony that they don’t want any part of a second commitment period of the Kyoto Protocol (indeed in the case of Canada, they don’t really want any part of the first period), pinning that obligation entirely on the EU.

With the evidence pointing ever more towards the inadequacy of current Annex I commitments, and time running out to avert dangerous warming, it’s time to turn up the heat on the shipjumpers who studiously avoid facing facts.

Closing the Gigatonne gap with low carbon development strategies

An analysis released yesterday demonstrates how waiting to take on deeper greenhouse gas reduction pledges will make it far more costly to avoid dangerous global warming. This reemphasises the message of the UNEP ‘bridging the gap’ report (being presented today by Achim Steiner in Durban). It shows that current pledges will not lead to limiting climate change below 2 degrees, but there are several options to close the gap.

Parties in the Kyoto Protocol already have obligations through 2012, but a host of accounting loopholes have led to an excess of paper credits compared to real reductions. And the pledges for 2020, some of which are already law as in the EU, are commitments determined nationally, without a global approach to ensuring the adequacy of commitments at a collective level.

Tackling the inadequacy of commitments was noted indistinctly in the Cancun agreement. Adding specifics is the subject of several separate parts of the negotiating text under discussion in Durban.  Predictably, the US wants nothing to come of it in the convention text. Small island states are pushing to have a proper consideration. The EU is being cautious in the Kyoto Protocol discussions because it realizes that if it is all but isolated in a second Kyoto period, adequacy reviews could be focused on them.  And developing countries by and large are protecting the strict division in levels and nature of effort between developing and developed countries, to the point that many are willing to side-step a proper consideration of the gap at global level.

A new WWF report hopes to cut through the posturing by demonstrating how all countries, developed and developing, can play a role according to their respective responsibilities and capabilities.  Planning development in a carbon constrained world outlines the role of low carbon development plans, with case studies from Brazil, Germany, Mexico, Scotland, South Africa and the UK.

In Durban, it is essential that the splits among parties trying to protect their own interests doesn’t hinder recognising the gap and resolving to tackle it in a timely fashion. As the Marshall Islands said in a negotiating session yesterday, if we are mandated to investigate whether current pledges are inadequate, it’s pretty obvious the next step is to figure out how to tackle this fact, otherwise what are they all doing there?

Since the Copenhagen climate conference delivered a tepid political statement about combating climate change, the United States has tried to argue that it has all it wants out of an international accord. That is to say, very light on international systems to set and enforce obligations. The US claims this is largely a matter of equity – as long as competitors like China don’t have parallel obligations, it would be unfair to take on more binding commitments.

The US position has been the equivalent of a trump card, as freedom from binding targets has been an article of faith for developing countries for 20 years. This left America feeling comfortable that it and China are confreres in their desire to avoid targets.

Now in Durban, the Chinese government has been floating an informal proposal that would involve them potentially taking on targets within a decade. The conditions for agreeing to this would include a second commitment period of the Kyoto Protocol in the interim, and a review of its implementation.

After US vilification of China on climate for nearly fifteen years, it may well be that the shoe will shortly be on the other foot. The US continues pushing off climate action largely because influential political groups basically don’t believe in undertaking any. Meanwhile China is showing signs of using the same period preparing to take obligations, possibly emerging the more ambitious of the two.  We’ll see how this evolves in Durban and beyond.

New pro-gas report presents alternate reality

In the movie the Matrix, Morpheus invites Neo to choose between two pills. Taking the red pill will allow Neo to escape from the Matrix and fight for freedom in the real world. If he takes the blue pill he will wake up in his bed and continue to enjoy the convenient fiction he has always known as reality.

A new IHS CERA report released today (‘Sound Energy Policy for Europe’) has the ring of truth about it. Continue reading →

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Last week the European Commission published its review (COM 2011/581) of the fluorinated gases (F-gas) Regulation (842/2006). It was a depressing confirmation of what we NGOs predicted years ago: the leak-prevention approach doesn’t work nearly as well as intended. The Commission’s new ideas about policy moving forward could have been copied almost verbatim from the position I wrote for CAN Europe in 2000. Continue reading →

Speech, 22 September 2011, European Policy Centre, Brussels

I will start by addressing the main question of the day – what was the effect of the Fukushima disaster on the path of nuclear power in Europe? The short answer is that it reinforces a trend rather than providing a shock to the system in the way that Chernobyl was. If we consider probably the biggest specific reaction, the reactor shutdowns and accelerated phaseout plans in Germany, we see that net effect is to move quicker to an already planned outcome (or rather, to return to the previous schedule). If we look at Italy, the referendum continues a position Italy has been in since the phase-out decision in 1987. In other words, the trend has been sharpened by Fukushima, but is far from shaped by it. Continue reading →

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