Commission staff working document

3.3.1.Introduction

Climate change has generated worldwide attention since the adoption in 1992 of the UN Framework Convention on Climate Change (UNFCCC), as reinforced by its Kyoto protocol and other policy initiatives. Gradually, the need for developing countries to deal with the issues has been growing.

While developing countries, in particular the poorest, made little contribution to the climate change effects which they are already experiencing, the more advanced developing countries, including emerging economies, are now considered to be an essential part of a comprehensive and global long-term solution. Their further economic development should be based on low-carbon plans or strategies encompassing all relevant sectors. Furthermore, several developing countries are covered by vast areas of natural tropical forest, and other carbon rich ecosystems such as peatlands, wetlands and grasslands, which hold invaluable carbon stocks and biodiversity rich ecosystems providing essential services to the planet.

However, many developing countries, in particular the more advanced, are growing their economies at a fierce pace, while applying unsustainable production and consumption paths, adding already to the climate change burden. The development of low carbon plans are therefore important to contribute to the decline in global emissions. Finally many countries, especially the poor, who are low emitters, and the vulnerable, do not have the financial and technical capacities to face the consequences and impacts of climate change. While adaptation and poverty reduction remain the highest priorities for these countries, they could also take advantage of developing their economies along a low carbon path.

Developing countries are a diverse group ranging from the poor LDCs to the new emerging economies and should be treated with different approaches reflecting the heterogeneity of the countries, their capacities and overall responsibilities. The PCD element of the EU's climate policies will be crucial to the success of the fight against global warming

3.3.2.Progress towards PCD Commitments

3.3.2.1.EU Climate Change Mitigation Policies

At the level of the EU, the main policy achievement has been the adoption of the Climate Change and Energy Package in December 2008⁶⁷. The package sets targets, by 2020 compared to 1990, to cut greenhouse gas emissions by 20% and to establish a 20% share for renewable energy (See chapter 12 on Energy Policy). The package includes a further strengthened and extended EU Emission Trading Scheme (ETS) as a centrepiece The ETS is the EU's key tool for cutting emissions cost-effectively⁶⁸. The review of the ETS ensures that there is investor certainty with regard to offsetting credits that can be used for compliance after 2012 including the continued use of Clean Development Mechanism (CDM) and the potential of new offsetting mechanisms if agreement is reached, as hoped for at the Copenhagen conference on a post-2012 climate framework.

In addition, the package includes the decision on how to share efforts in the sectors not included in the ETS, a directive for environmentally safe carbon capture and storage (CCS) and directives on CO2 emissions from cars and fuel quality. The renewable energy directive, including biofuels, is discussed in chapter 12 (Energy)

Europe has clearly established itself as world leader in the fight against climate change, offering a number of opportunities to developing countries.

In March 2008, a Paper⁶⁹ from the High Representative and the European Commission to the European Council addressed the interrelations between climate change and international security. The joint paper identifies a number of threats (such as conflict over resources, loss of territory, border disputes, coastal damages, environmentally induced migration etc.) and, in relation to third countries, advocates revisiting and reinforcing EU cooperation and political dialogue instruments, giving more attention to the impact of climate change on security. This could lead to greater prioritisation and enhanced support for climate change mitigation and adaptation, good governance, natural resource management, technology transfer, trans-boundary environmental cooperation (inter alia water and land), institutional strengthening and capacity building for crisis management.

The Communication issued by the Commission in October 2008 addresses the challenges of deforestation in the context of international efforts to tackle climate change⁷⁰. This document stresses the importance of policy coherence and calls for a review of the impacts of EU policies on global deforestation⁷¹. In the international negotiations on climate change, the Commission proposed to pursue the objective of halting global forest cover loss by 2030 at the latest and reducing gross tropical deforestation by at least 50% by 2020. This would be achieved by creating a Global Forest Carbon Mechanism (GFCM) which would reward developing countries for emissions reductions achieved by taking action to reduce deforestation and forest degradation.

Fighting deforestation will need an appropriate level of funding, some of each could come from proceeds of allowances auctioned in the EU Emissions Trading System. It is estimated that if 5% of auctioning revenue were made available to the Global Forest Carbon Mechanism (GFCM), between €1.5 billion and €2.5 billion could be raised in 2020. In the framework of the GFCM, a pilot phase could be envisaged to test the inclusion of 'deforestation credits' (credits for avoided deforestation) in the carbon markets, allowing governments to make use of these credits to help achieve their post-2012 emission reduction target.

The Union's activities deployed under the ambitious EU climate policy will directly benefit the poorest and most vulnerable developing countries as the aim is to limit global warming to less than 2 °C relative to pre–industrial levels.

Germany and Climate Change

Since 2007, Germany has been providing approximately €400 million annually towards climate change initiatives by auctioning 10% of its European emissions allowances. From this amount, €120 million has been earmarked for international climate change projects, particularly in developing countries. This money is managed by the International Climate Initiative (ICI), which is a fund administered by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) of the German Government. The ICI has two main objectives, (i) the promoting of sustainable energy and supply and (ii) promoting measures for adaptation to the impacts of climate change and conserving biodiversity with climate relevance. Thematic areas of support include the development of strategies and national adaptation policies as well as technical capacity development in areas such as transport. ⁷² The ICI is only one part of Germany’s overall approach to climate change and development cooperation, and is strategically designed to support the UN climate change negotiations post-2012.⁷³

3.3.2.2.EU Policies: Adapting to Climate Change

The Green Paper on adapting to climate change in Europe, adopted in June 2007, and the follow-up White Paper, adopted in April 2009, are the first Commission initiatives to strengthen adaptation efforts within the EU and beyond.

Adaptation is of great relevance to developing countries, in particular to the poorest and most vulnerable among them. Countries that have contributed least to the causes of climate change are expected to be hit hardest. This is due to their limited financial resources and ability to deal with the effects of climate change impacts. Poor communities are highly dependent on natural resources such as water and soil, needed for food production and drinking water. These natural elements are themselves affected by climate change. .

Adaptation is now given the same importance as mitigation and this is particularly relevant for developing countries. While dramatically reducing greenhouse gases remains by far the best and cheapest option to prevent dangerous climate change, adaptation is needed to deal with the effects of climate change that are already being felt and unavoidable.

3.3.2.3.Post -2012 negotiation: Bali 2007, Poznan 2008 toward Copenhagen 2009.

The EU is a prominent actor on the international scene, developing innovative and leading positions for the post-2012 negotiations to deliver meaningful commitments in terms of Climate Change and Development.

In Bali, in 2007, at the 13th UN Conference of the Parties of the UNFCC, the EU put its case for limiting emissions (mandatory emissions reductions by developed countries, effective contributions by emerging economies, strengthening and extending the global carbon market, increasing cooperation on research, development and deployment of clean technologies) while proposing an active partnership for developing countries to address adaptation needs, to tackle the unavoidable impacts of climate change in the poorest and most vulnerable countries and to reduce emissions from deforestation. The EU committed itself to doing more to mobilise the necessary resources, including through expansion of the global carbon market and via instruments such as the Global Energy Efficiency and Renewable Energy Fund (GEEREF) (See also chapter 12 on Energy).

In December 2008, in Poznan, the 14th UN Conference of the Parties of the UNFCCC proved a useful staging post on the way to the Copenhagen Conference in 2009 where an ambitious new global climate agreement for the post-2012 period should be agreed upon. Progress was made on operationalisation of the Adaptation Fund, which is to finance adaptation in developing countries thus clearing the way for developing countries to receive funding to strengthen their resilience to the impacts of climate change.⁷⁴ In addition, consultations on guidance for the operation of the Least Developed Countries Fund (LDCF), which is largely financed by the EU, were completed. As regards tropical deforestation, responsible for almost 20% of global greenhouse gas emissions, progress was achieved on the future regime to reduce emissions from deforestation and forest degradation, known as REDD,⁷⁵ as part of the lead-up to Copenhagen. Last but not least, the Poznan Programme on Technology Transfer for developing countries was adopted, funded by €50 million of existing resources from the Global Environmental Facility thus highlighting the importance of technology transfers and the need for policy synergies to be sought between Climate Change and Research Policies.

Research and Climate Change

Climate change is of growing public concern and it is an important political priority of the European Union also in the context of international research cooperation. The Seventh Framework Programme for Research and Technological Development (FP7) is following previous Framework Programmes by putting particular emphasis on international co-operation actions in this area. FP7 research topics address the urgent needs for sound scientific information on further understanding of the climate system, impacts, vulnerability, adaptation and mitigation to support climate change policy developments and implementation as well as the IPCC (Intergovernmental Panel on Climate Change) process. The FP7 Environment Programme is promoting international cooperation by encouraging ICPC (eligible International Co-operation Partner Countries) participation in various topics and through Specific International Co-operation Actions (SICA) across all activities of the work programme. Two of the many examples of successful projects on climate change research with participation of developing countries and emerging economies are AMMA (African Monsoon Multidisciplinary Analysis) with 21 partners from Africa and HighNoon (adaptation to changing water resources availability in northern India in the face of Himalayan glacier retreat and changing monsoon patterns) with key contributions from three Indian partners.

The Communication⁷⁶ towards a comprehensive climate change agreement in Copenhagen was adopted in early 2009 and proposes the main building blocks -mitigation, adaptation, financing and technology - for reaching such an agreement. These proposals were further strengthened by several Council conclusions. Their relevance for attaining the MDGs has been underlined.

In preparing for the Copenhagen Conference, scheduled for December 2009, the EU has recognised developing countries' needs and is prepared to take its fair share of the financing required to ensure adequate, predictable and sustainable financial transfers, including leverage of private investments, to support developing countries in their adaptation and mitigation efforts. Existing channels for aid delivery should be explored before creating new mechanisms. The principles of effectiveness, efficiency, equity, transparency, accountability, coherence, predictability and sound financial management should apply, as well as the need to coordinate funding initiatives⁷⁷, promote sharing of best practices and capitalize on experiences gained in this respect.

On the subject of mitigation, the EU's view is that developing countries as a group, particularly the most advanced ones, should achieve a substantial and quantifiable lowdown of their emissions growth rate⁷⁸ through the development of low-carbon plans and strategies. Such strategies should be supported financially and technically in particular for the poorest and most vulnerable countries such as LDCs and SIDS, should they choose to develop one.

Mitigation and adaptation efforts must be supported by much greater collaboration on technology research, development, deployment and diffusion.

3.3.2.4.EU and Developing Countries

Poor countries across the world and small low-lying island states such as atolls are very vulnerable to climate change. But even the more advanced developing countries are likely to contain regions or communities that are very vulnerable. For example low-lying fertile and densely populated deltas across the globe are very fragile (e.g. Egypt, Bangladesh) due the combined effects of a number of causes including sea level rise, sediment depletion from dams constructed upstream, changes in storm patterns, frequencies and intensities, changes in river flow regimes, salinisation due to over-extraction of natural groundwater etc.

While efforts to conduct dialogue with and support for developing countries take place on all continents, the inter-linkages between Climate Change and Development are particularly important in Africa, a continent that remains tragically affected by poverty. Over the last two years progress has been made in setting up climate change priorities for cooperation and in identifying deliverables and joint initiatives with the African continent.

In November 2008, the EU-Africa Joint Declaration on Climate Change welcomed the European Union’s intention to support the African region in its adaptation and mitigation efforts, through the Global Climate Change Alliance (GCCA) and other appropriate bilateral and multilateral instruments of cooperation. A decision was also made to speed up the operationalisation of the Adaptation Fund while seeking to mobilise new and additional funding for adaptation.

In July 2008 the Climate Change Declaration at the EU-South Africa Summit underlined the partners' desire to cooperate also on the issue of carbon capture and storage (CCS)⁷⁹. South Africa has been proactive in the UNFCCC negotiations and is one of the EU's strategic partners for discussing the avenues leading to a post-2012 climate regime.

Launched in December 2007, the Africa-EU Climate Change Partnership⁸⁰ has two priority actions: to build a common agenda on climate change policies and cooperation and to cooperate to address land degradation and increasing aridity and desertification. Several meetings of the European and African Implementation Teams took place in 2008 leading to an agreement on internal working arrangements, on the necessity to associate in the partnership climate change negotiators as well as development practitioners and on the necessary deepening of the dialogue with Civil Society, private sector and parliaments, as well as other international partners.

On the African side a strategic review is being conducted in order to improve the prioritisation of climate change activities covering a wide range of issues from capacity building to water resources management to adaptation in agriculture, desertification, urban development, disaster risk reduction, deforestation and sea level rise. Both the EU and African sides are currently working on the 2009 deliverables for the partnership. These include the CLIMDEV initiative designed to mainstream climate information into development planning and practices; the pre-feasibility study of the Great Green Wall of Sahara; capacity building efforts for UNFCCC negotiators (African Roadmap for UNFCCC negotiations…); the improvement of African access to carbon credit and the carbon market; the implementation of the GCCA and the cooperation on the definition and implementation of EU and AU disaster risk reduction policies.

3.3.2.5.Development Policies to address Climate Change in Developing Countries

Several EU-level policies and programme reflect the climate change high political priorities of climate change. The Joint ACP-EU Declaration on Climate Change and Development of 2009 renewed political commitments to integrate climate change issue into national poverty reduction strategies to which Commission and Member State cooperation programme are aligned. Almost all EU Member States have now adopted national climate change policies and efforts to integrate development aspects are underway, from the Czech Republic, which actively supports mainstreaming of climate change into development cooperation, to Belgium, where a dedicated committee ensures close coordination between environment and development policy makers at national and regional level. At Commission's level, the "Disaster Risk Reduction" Communication issued in February 2009 and the revision of the "Environmental Integration Strategy" scheduled for 2009 are endeavours toward integrating climate change issues into development cooperation⁸¹.

Apart from the support given to address climate change in the European Commission's development programmes (country and regional development programmes (NIP and RIP) for the period 2007-2013, IntraACP budget lines) of key importance to developing countries is the thematic programme for the environment and the sustainable management of natural resources, including energy, known as ENRTP, with a worldwide scope and a total budget of €889.5 million for the period from 2007 to 2013 (See Chapter 3 on Environment Policy). Its objective is to ensure that environment is consistently taken into account in the various cooperation instruments and to give developing countries more information on the impact of climate changes. Part of the funding specifically targets climate change support activities, including capacity-building for African countries. Other capacity building initiatives includes EUroClima in Latin America which is specifically geared to examining the socio-economic impact of climate change on South American countries⁸² and which is funded through the regional Development Cooperation Instrument (DCI) funds..

However the main development initiative to address climate change issues was launched in September 2007 when the European Commission proposed a new alliance between the European Union and the poor developing countries that are most affected and have the least capacity to deal with climate change. Through this Global Climate Change Alliance (GCCA)⁸³, the EU and these countries are working jointly to integrate climate change into poverty reduction strategies and into development cooperation. In 2008, the implementation modalities were worked out and Vanuatu, Maldives, Cambodia and Tanzania were the first countries to be selected for support⁸⁴. Further, thanks to the political dialogue dimension of the GCCA, African, Pacific Islands and Caribbean countries are working towards a common position on tackling climate change and focusing their adaptation efforts. The EU-Africa Declaration, the Niue Declaration for the Pacific and the EU-Cariforum Declaration in 2008 reflected these regions' concerns on climate change and the European Union's efforts to achieve an ambitious post-Kyoto international agreement

The GCCA, supported by Sweden, Czech Republic and the Commission is a positive step taken by the EU in favour of developing countries. Countries like Denmark, Czech Republic, Finland and the Netherlands have participated in some meeting and discussions. In addition several other Member States are keen to learn from the process of the GCCA which will need to actively engage with other initiatives, such as the Climate Investment Fund. Two other international initiatives focusing on developing countries have been launched by Germany and Sweden (the International Climate Initiative and the International Commission on Climate Change).

Member States have also been very active in supporting climate change programmes in developing countries. The Netherlands for example provided capacity building for developing countries and spent €19million on research and policy-influencing activities in 2008. Sweden supported Clean Development Mechanism (CDM) projects in Botswana, China and India, and capacity-building projects on CDM in Kenya, Tanzania and Uganda. It channelled its support mainly through the UNFCCC trust fund and financed the adaptation fund. It allocated more than SEK4 billion (circa €380 million) in additional support to climate-related development assistance over the period 2009-2011, on adaptation initiatives in the poorest countries and on measures to limit the concentration of greenhouse gases. The UK funded a number of Regional Economics of Climate Change Studies (RECCS), which explore alternative mitigation scenarios for key countries and developing regions, and the costs and benefit of adaptation.

These are but a few examples of the wide- ranging initiatives aimed at helping developing countries adapt to climate change.

3.3.3.Conclusion & Outstanding Issues

Good progress has been made in formulating climate change policies as their development dimension is becoming better understood.. Over the last two years, awareness of the key role, and responsibilities of developing countries, including emerging countries, in tackling climate change issues has made development a prime concern of policy makers. Reciprocally, the integration of mitigation and adaptation efforts in development cooperation has progressed.

Within the EU, the Climate Change and Energy Package will offer important opportunities for developing countries in particular with regards to CDM, CCS, sustainable production of biofuels, the development of low-carbon strategies and even domestic emission trading systems.

Progress has also been made in the post-2012 negotiations which should take development concerns into account in the run-up to the Copenhagen Conference, in December 2009. Some issues of interest for developing countries (e.g. related to the CDM mechanisms; the access to LDCF by poor countries; the future regime for reducing emissions from deforestation; facilitating transfers of clean technologies to developing countries; financing of climate change adaptation and mitigation efforts, implementation of the Africa-EU Partnership on Climate Change) remains to be debated and agreed upon before Copenhagen.

Regarding the particular concerns of LDCs and other countries with limited adaptation capacities, the GCCA provides a new and formidable platform to help the poorest developing countries. The regional declarations of 2008 in the Pacific, the Caribbean's and Africa show a convergence of views and interests between developing countries and the EU, bear witness to the strong progress made in political dialogue on climate change and offer significant opportunities for further actions to address climate change issues in a context of sustainable development.

Policy Coherence for Development has therefore progressed and EU Member States rate the success in promoting PCD in the area of climate change as average to good (see chart below⁸⁵). Despite progress in many areas, and the political impetus given to EU climate change policy in 2007-2008 in the light of increasing food prices and food security risks, the EU's national institutions still struggle to promote policy synergies due to an insufficient number of qualified personnel in the public and government sector, the insufficient involvement and cooperation of government institutions in the process of tackling climate change and the lack of financial resources and relevant information on the issues at stake.

While development policies now incorporate mitigation and adaptation measures, implementation is still at an early stage. In this context, there is scope for strengthening existing cooperation and build a common agenda on climate change policies.

The Council contribution of March 2009⁸⁶ on the preparation for Copenhagen confirmed that climate change is widely seen as a major threat to achieving the Millennium Development Goals (MDGs), potentially reversing progress made in the last decade.

The post-2012 negotiation under the UNFCCC in 2009 will therefore be a critical milestone in the fight against climate change and the promotion of synergies with development cooperation.

Given that the financial and economic crises are likely to divert the attention and budget allocation of developed as well as developing countries towards issues of immediate concern, it is of the utmost importance to enhance policy dialogue, and to reinforce further the Global Climate Change Alliance, to develop a shared vision with the most vulnerable developing countries highlighting necessary coherence of our actions in the field of climate change, energy and development.

In the near future, the economic opportunities offered by the "greening" of economies throughout the developed, emerging and developing worlds, if equitably shared between all, should allow the double objectives of limiting climate change and reducing poverty to be achieved through a set of complementary and coherent policies and actions. This shared vision of sustainable development should help secure ambitious and innovative commitments to be agreed by all parties in the UNFCCC post-2012 discussions

Outstanding Issues

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  Encourage the design of low-carbon development strategies in developing countries in particular through capacity building.
  
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  Develop innovative form of financing for supporting climate change actions in developing countries, including financial support to LDC and SIDS to tackle adaptation needs.
  
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  Support studies and research on the impact of climate change and assist with dissemination of information/awareness-raising activities in developing countries.
  
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  Reduce geographical imbalance of the CDM by increasing access of LDCs to CDM projects.
  
• 
  Stronger participation of developing countries in EU and international climate change policies.
  
• 
  Assess the impact of trade policy for environmental goods on climate change.
  

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ECD -> Table of annexes annex I: Glossary 4
ECD -> En commission of the european communities brussels, 12. 12. 2008 com(2008) 853 final annex annex II to VIII
ECD -> Report from the commission to the european parliament and the council european community safa programme aggregated information report
ECD -> Report from the commission european community safa programme
ECD -> Commission staff working document
ECD -> Commission of the european communities brussels, 24 2008
ECD -> Commission staff working document
ECD -> Communication from the commission to the european parliament, the council, the european economic and social committee and the committee of the regions
ECD -> Annex I iccat species

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