Los múltiples instrumentos de la política climática de la UE

So, in view of the science and in view of the international commitments, what can we do to reduce emissions of greenhouse gases? The European Union uses many types of policy instruments, indeed all countries in the world use a variety of policy instruments so these are not unique to Europe, but we have been combining, for example, the use of economic instruments, that may be market-based or may not, to create incentives. Such examples I will go into later. We have been using performance standards or technical standards as well as a way of improving the performance of appliances and of vehicles in order to emit less CO2 when they’re being used.

And we use other sorts of policies and measures like information and transparency measures to inform people through labelling, for example, of what the emissions are of using any particular product. And, of course, we use financial instruments. The EU budget is being “greened” and there is a lot of finance that’s going to be needed in the decades ahead, an awful lot of investments have to be financed and so a lot of work is being done in this area, including defining what is a green investment or what is a green bond. So, the EU has examples of all of these different types of instruments and I’m going to go through them category by category.

The first one is pricing because people respond to prices and the EU’s Emissions Trading System is the instrument that we’ve developed that is applicable to large installations, like power stations, like cement factories or steel production facilities. That’s one of the economic instruments we used which is market-based. If we use something like fuel taxation measures, which do exist at the EU level in terms of minimum excise duty levels on fuels, those not so much market-based but they are economic instruments designed to influence behaviour and at the moment the EU is revisiting its energy taxation rules. Clearly, by pricing governments are trying to change behaviour of consumers, whether they are business or private consumers.

There are other sorts of taxes and charges, on air travel, for example, some Member States apply these at the national level. And, of course, the subsidies that have been given are towards renewable energy which started with mechanisms like fixed feed-in tariffs where a fixed amount was paid by governments for certain quantities of renewable energy. That’s evolved a bit towards tendering or “contracts for difference”, which are more sophisticated funding mechanisms which are also designed to be cheaper, more efficient funding mechanisms, but you can see subsidies are also a way of influencing pricing. The second category of instruments are standards and then in those I would include the renewable energy targets or obligations that are put on fuel suppliers, for example.

They are told that the supply they give, the supply of fuel must integrate a certain level of renewable energy. And then appliances and devices are also being regulated in terms of energy efficiency where minimum performance standards are being set under the Ecodesign Directive, for example, and these are very important in reducing emissions. We don’t realize as consumers that that sort of standard-setting process is going on, but when we change our appliances and buy new appliances they are often more better performing appliances because of these underpinning regulations. We also at the European level set new building standards on energy efficiency of new buildings and their energy use.

And most notably we make CO2 emissions standards for cars, for trucks and buses and so those are also performance standards that are widely used in the area of climate change in Europe. And the other category of measures I call “engagement” measures, such as labelling, there is an obligation for car manufacturers to advertise the CO2 emissions per kilometre at the point-of-sale or on any advertising material. Those give the consumer information just as the energy labels that rate appliances give them information. Now, do consumers respond to those labels? Does the information influence their choice? Perhaps not, which is why I called them engagement measures.

They don’t necessarily, people don’t all buy in relation to energy performance, but some want to and they are being enabled to by these kinds of instruments. And, of course, the the availability of EU funds such as exists for innovation in the Innovation Fund for innovative technologies, those sorts of measures are engagement measures. You don’t have to apply for those funds, but they are there and you can do and they can help. So, putting them together, the EU climate policies are, if you like, using these three approaches, let’s say, and the next thing to explain is that EU climate policy has three pillars that have developed over time.

One pillar is the Emissions Trading System which covers a very large part, about 45% of our CO2 emissions is covered by the Emissions Trading System. The Effort Sharing is for those sectors that are outside the Emissions Trading System where Member States have differentiated targets to ensure that the emissions from those sectors fall over time, such sectors would be transport, would be buildings, would be agriculture.

So, the Effort Sharing regulation sets those targets for Member States, but leaves the Member States relatively free to employ the measures it wishes to employ and some of the European policies, like the CO2 standards for car, are measures that are taken at the European level to help the Member States get to those are difficult targets that have been set. And the LULUCF of regulation, that’s a bit of jargon, it sounds awful, the LULUCF stands for land-use, land-use change and forestry regulation. It’s basically a regulation that covers land-use which can be for forests or which can be other types of land categories like wetlands.

These are important from a climate perspective because those sectors as a whole are often capable of removing emissions from the atmosphere through natural processes and fixing it into the soil, into into the ground in the case of wetlands, or in the case of trees it would be into the tree itself in the root system. So, that’s extremely useful and to be enhanced over time and the Member States are increasingly being joined to ensure that those land-use sectors are making their contribution to removals of CO2.

So, those two pillars are, if you like, if you put the instruments superimposed on those pillows, you can see that, you know, in the first pillar of course there is explicit pricing of carbon, Effort Sharing, the CO2 standards for cars is one of the measures along with energy efficiency legislation at the European level, these are things which are employed at the European level. And the monitoring and reporting and verification, that’s what’s the acronym MRV, I’m calling it an engagement measure because you need that information to do so much else with and it’s pretty well true of all the three different pillars of EU policymaking that we need good monitoring, reporting and verification.

We need good data and transparency can be enhanced if we’ve got that sort of data. So, those are the sorts of what, very simplistically, how the instruments are constructed in the European Union.