In the midst of the United Nations Climate Change Conference being held in Montreal -- and the continuing pressure for the US to get on board with the Kyoto Protocol (and its hope-for extensions) -- a few items caught my eye. First, this from EurActiv:
With the successful launch of the EU CO2 Emissions Trading Scheme (EU-ETS) on 1 January 2005, the European Commission will want to present the EU as a world leader in cutting global warming gases at the 11th Conference of the Parties to the UN Framework Convention on Climate Change in Montreal (COP-11)...
Highlighting its successes before heading off to Montreal, the Commission indicated that 230 million tonnes of CO2 have already been traded on the EU carbon market since January 2005, representing 3 to 4 billion euros. EU-15 countries have reduced their emissions by 1.7% since 1990 while achieving economic growth of 27%, the Commission pointed out.
This is however still short of the 8% reduction target the EU-15 agreed to cut under the Kyoto Protocol. The latest inventory report from the European Environment Agency showed that total greenhouse gas emissions in the EU-15 went up by 1.3% in 2004 (EurActiv, 21 June 2005). The Commission described the figures as disappointing at the time. But Brussels said it remained confident that further measures, including the full implementation of the EU-ETS would help improve the situation.
However, in a recent development, the Court of First Instance in Luxembourg dealt the Commission a serious blow by ruling that the UK was entitled to raise its CO2 emissions ceiling approved under the EU-ETS (EurActiv, 24 Nov. 2005). The court ruling could have serious implications for the Commission's ability to enforce the scheme, but Brussels said it had still not decided whether to appeal against the ruling.
Meanwhile:
European energy ministers on 1 December have called on the Commission to review the EU CO2 Emissions Trading Scheme "as soon as possible" in order to put it in line with policies aimed at boosting economic growth and competitiveness...
The ministers invite the Commission to produce a set of "comprehensive and reliable data and ensure that remedies to possible market disturbances in sectors affected by the EU Emissions Trading Scheme are provided in good time".
A French official close to the negotiations told EurActiv that all member states agreed that new climate change measures proposed by the Commission should take full account of possible consequences for the economy and be based on an extensive cost-benefit analysis.
In related news, Environmental Economics has this:
... 2002 GHG emissions levels relative 1990 levels (the comparison year in the Kyoto Protocol). The U.S. is 13% over 1990 while the UK, France and Germany have reduced their GHG emissions...
According to the UN's report National greenhouse gas inventory data for the period 1990–2003 and status of reporting, U.S. "Gg CO2 equivalent" was 6.1 million in 2000 and 6.07 million in 2003 (about a .9% decrease). And the EU's emissions have increased. Here is the chart:
Much of the U.S. growth in GHG emissions is due to the economic growth of the 1990s (i.e., it's Clinton/Gore's fault). And, as env-econ commenter "tc" points out, the 2001 recession probably had something to with the GHG slowdown from 2000 to 2001.
So, what would that cost-benefit analysis look like if the EU could guarantee economic growth comparable to the US over the past decade or so?