Summary: 9 February 2009, Brussels - Speech by Stavros DIMAS, European Commissioner responsible for environment, "Copenhagen must build the road to a sustainable global energy future" at the 2009 EU Sustainable Energy Week
Ladies and Gentlemen,
Good morning. I would like to start by thanking Andris Piebalgs for inviting me to participate in the Energy Week.
And I am of course very pleased to see that the theme of this year is a sustainable energy, which logically brings together the climate and energy challenges.
The International Energy Agency rightly stressed in its World Energy Outlook for 2008 that "current trends in energy supply and consumption are patently unsustainable - environmentally, economically and socially."
Accordingly, it has drawn very clear recommendations: Policy action is urgently needed to ensure secure energy supplies and, at the same time, curtail rising emissions of greenhouse gases. A global energy revolution needs to be launched to foster energy efficiency and thereby enhance energy security while significantly contributing to the fight against climate change.
I believe it is no exaggeration to say the European Union is leading this revolution with the climate and energy package agreed in December.
We are showing the way ahead not only because we believe that we have a responsibility in doing so and that such a change is imperative - but also because we are convinced that it will have multiple benefits for Europe.
By substantially improving energy efficiency and the share of renewables in our energy mix, the package will reduce our greenhouse gas emissions, boost our energy security and strengthen our competitiveness. By preparing Europe for a low carbon future, we are strengthening it in the face of globalisation and further consolidate our position on the world markets. This is typically a win-win-win case!!
Let me also add that the measures we have agreed upon, thanks to an unprecedented determination shared by the Commission, the Council and the European Parliament, demonstrate that fighting climate change and increasing energy security are important means to counter today's economic crisis - as the Commission later confirmed with a special emphasis given to green energy investments in its Recovery plan.
The package will give a shot in the arm to the European economy, to jobs and to innovation in the short to medium term. It lays the basis for a greener, more sustainable, low-carbon economy in the longer term. And it gives the EU a first mover advantage in developing the sustainable energy technologies of the future.
After five months the economic crisis is still dominating the daily news, and that is understandable. But we should not lose sight of the fact that in the longer term it is climate change which represents perhaps the greatest threat of all - not only to our prosperity but also to the lives and livelihoods of millions of people in vulnerable areas of the globe. This is already happening and latest science even tells us that this is accelerating.
Building a sustainable global energy system will be crucial to overcoming this threat since two-thirds of greenhouse gas emissions today are energy-related.
With the climate and energy package Europe has put itself firmly on the road towards a low-carbon future. Now we need to convince others to follow suit and put the world firmly on the path to a low carbon and energy efficient economy.
Next December in Copenhagen the international community has an historic opportunity and responsibility to lay the basis for this by concluding a new United Nations climate agreement.
The importance of this new agreement cannot be overestimated: with global warming accelerating, Copenhagen is the world's last chance to bring climate change under control before it is too late.
To succeed, we are going to need a new agreement that is ambitious enough to match the severity of the climate challenge we face, that is entailing efforts that will ensure that global temperature will not increase beyond 2°C.
That means putting the world on track to stabilise greenhouse gas emissions before 2020, and then cutting them by at least half of their 1990 levels by 2050. Of course, and in order for this long term objective to materialise, we first need bold efforts in the short term.
Developed countries must therefore continue to lead by reducing their collective emissions in the order of 30% below 1990 levels by 2020. As agreed in the package, the EU is ready to scale up its emissions reduction from 20% to 30% provided our partners in the industrialised world take on comparable commitments and emerging economies also step up their efforts.
In setting such targets, we will be firing the starting gun in a global race to build a sustainable, low-carbon energy system. We will be sending a clear signal to businesses around the world that the international community is determined to tackle climate change seriously.
There are many things to say about the challenges and opportunities ahead of us on the road to Copenhagen and beyond. Let me touch briefly on three of them.
The first there is vast potential to substantially reduce global emissions at zero or even negative cost, simply by improving energy efficiency.
This was most recently confirmed by the analysis underlying the just adopted Commission Communication setting out its position for Copenhagen.
The consulting firm McKinsey recently quantified potential emission reductions that could be achieved through measures that would deliver a net economic gain within a relatively short period of time. It found that, by 2030, the equivalent of today's emissions from the US and China combined could be avoided at no net cost to the economy.
On top of this, greater energy efficiency and renewable energy have significant additional benefits in terms of reducing air pollution, stimulating economic growth and improving people's access to energy.
This is the case particularly in the developing world. We will need developing countries to contribute to a global solution by holding the growth in their emissions well below business as usual levels. The benefits I have just mentioned provide a strong incentive for them to do so. And this is precisely why some of them have already started to move in that direction. The challenge ahead of us now is to further encourage and support such moves. Once again, the various stimulus packages being put
forward, including in the developing world, should offer opportunities to re-direct investments to low carbon and energy efficient technologies and infrastructures. Let's make the best of these "opportunities".
All of this is not to pretend that there will be no cost to cutting global emissions by the extent needed to prevent dangerous climate change. There will be, but this is far below the long-term cost of not taking action, which Lord Stern's review has estimated at between 5 and 20% of global GDP each year.
My second point is that the development and deployment of new, clean energy technologies needs to be greatly accelerated.
This is why the European Commission is proposing a dramatic increase in research, development and demonstration of energy technologies worldwide. We need quickly to double spending back to its levels in the 1980s and then double this again by 2020. Through greater innovation in low-carbon technologies we will be reducing the cost of emission reductions in the longer run.
And of course, fast deployment critically depends on an enabling regulatory environment: stepping up targets and efforts give the right predictability and incentive to invest in low carbon technologies.
And this brings me to my third point: the crucial issue of finance.
Building the more sustainable global energy system needed to meet the emission targets we propose will require additional investment - in the order of €175 billion a year by 2020, we estimate. This is a big figure in absolute terms, but to put it into perspective it amounts to around 0.2 % of global GDP per year.
Over half of this investment will be needed in developing countries. We all know that there will be no deal in Copenhagen without a satisfactory arrangement to further mobilise finance and investments to reduce emissions and adapt to climate change.
This means the global agreement will have to put in place appropriate structures and mechanisms to trigger the investment needed, in particular in the energy sector. Let us not forget that in supporting developing countries we will also be creating future markets in which European businesses have every chance to play a leading role.
Public funding will be part of the solution. We need to consider creating innovative international sources of finance based on countries' emission levels and their ability to pay so as to secure predictable and sustained finance.
Carbon markets will also have an important role to play in leveraging private finance. Our goal is to link up the EU Emissions Trading System with the cap-and-trade systems being developed in other industrialised countries - including soon the US, we hope - to form an OECD-wide international carbon market by 2015. Putting a price on carbon emissions is crucial to correct the market failure that the climate crisis represents.
Ladies and gentlemen,
With the climate and energy package, Europe has put itself in the vanguard of the low-carbon energy revolution. Now we must make this revolution global by reaching an ambitious climate agreement at the Copenhagen conference in December.
There is huge potential for reducing greenhouse gas emissions at no or low cost, while the additional financing needed is nothing less than a necessary investment in a more sustainable world economy.
As we celebrate Sustainable Energy Week, let us keep our sights on the objective of making the world's energy sustainable throughout every week of the year.
Thank you.
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