Climate Change And The EU's Response

Climate change and the EU's response

What is the problem?

The world is getting rapidly warmer, and there is an overwhelming consensus among the leading climate scientists that this is being caused mainly by carbon dioxide and other 'greenhouse gases' emitted by human activities, chiefly the combustion of fossil fuels and deforestation. These gases remain in the atmosphere for many decades and trap heat from the sun in the same way as the glass of a greenhouse.

Global warming is already causing changes in the world's climate and these will become increasingly severe unless urgent action is taken to reduce emissions. This year's Fourth Assessment Report from the UN Intergovernmental Panel on Climate Change (IPCC), which represents the most authoritative and up-to-date global scientific consensus on climate change, concludes that the warming of the global climate system is "unequivocal" and accelerating. It points to a greater than 90% probability that increases in man-made emissions of greenhouse gases have caused most of the temperature increase seen since the middle of the 20^th century.

The global average temperature has risen by 0.76°C since 1850, with Europe warming faster than the average, by almost 1°C. The past 12 years (1995-2006) have included 11 of the 12 warmest years on record. The rate of sea level rise has almost doubled from 18 cm per century between 1961 and 2003 to 31 cm per century in 1993-2003.

The IPCC projects that temperatures and sea levels will continue rising without action to limit greenhouse gas emissions.

Its best estimate is an additional temperature rise over the course of the 21^st century of between 1.8° and 4.0°C, but in a worst case scenario the increase could reach 6.4°C. In historical terms, these are enormously rapid changes. Our civilisation has never been faced with a change in climate of anything like this magnitude. Even the lowest likely increase projected by the IPCC would push the world's temperature more than 2ºC above the pre-industrial level by the end of the century. This would take temperatures into the danger zone where irreversible and potentially catastrophic changes to the global environment become far more likely.

A further rise in average sea level of between 18 and 59 mm is anticipated this century. However, this range may be underestimated as the projections do not include the full effects of changes in ice flows.

What impacts is climate change already having and projected to have in future?

The warming of the global climate system is already evident in increases in average air and ocean temperatures, widespread melting of snow and ice, longer growing seasons and rising sea levels. The consequences of these changes include earlier spring peak water discharge into many glacier- and snow-fed rivers, increasing lack of snow at low-altitude ski resorts and a polewards shift in the ranges of plant and animal species. There is also evidence of increased human death rates in Europe and Asia during prolonged heatwaves.

There is strong scientific evidence that the risks of irreversible and possibly catastrophic changes in the global environment would greatly increase if global warming exceeded 2°C above the pre-industrial temperature. Examples of such possible changes include thawing of the Arctic permafrost, which would release huge quantities of methane gas into the atmosphere, or extensive melting of the Greenland and/or West Antarctic land-based ice sheets, which would raise sea levels by several metres in the long term (it is very likely that the melting of these ice sheets is already contributing to sea-level rise). The EU therefore takes the position that the objective of global action must be to keep the temperature increase within this 2°C limit.

The impacts of climate change are expected to become progressively more severe the higher temperatures rise. They are projected to include the following:

• Extreme weather events - storms, floods, droughts and heatwaves - will become more frequent, more widespread and/or more intense, causing human deaths and injuries and economic damage. It is likely that tropical cyclones will become more intense and that the areas affected by drought will increase. It is projected that by 2080 many millions more people will be flooded every year due to sea-level rise.
• Changes in rainfall patterns will put pressure on water resources in many regions, affecting both drinking water supplies and agriculture. As is already being observed, precipitation is very likely to increase in high latitudes and the tropics and likely to decrease in most sub-tropical regions. With a global temperature increase of 2.5°C above pre-industrial levels, over 3 billion more people worldwide are likely to suffer from water scarcity. Agricultural production in many African countries is projected to be severely compromised: as early as 2020 yields from rain-fed agriculture could be cut by up to 50% in some countries, exacerbating malnutrition.
• Warm seasons will become dryer in the interior of most mid-latitude continents, increasing the frequency of droughts and land degradation. This will be particularly serious for areas where land degradation, desertification and droughts are already severe. Developing countries will suffer particularly, and tropical diseases will extend their geographical ranges.
• The resilience of many ecosystems is likely to be exceeded this century by an unprecedented combination of climate change, the disturbances it will cause and other drivers of global change such as pollution and over-exploitation of resources. Geographical shifts in the occurrence of different species and/or the extinction of species will occur. Some 20-30% of plant and animal species assessed so far are likely to be at greater risk of extinction if the global average temperature increase exceeds 2-3°C above the pre-industrial level. Cold weather mammals like polar bears could be especially threatened.

The regions likely to be most strongly affected by climate change are:

• The Arctic: high rates of warming are projected which will impact on natural systems and human communities. Average temperatures in the Arctic have increased at almost twice the global average rate in the past 100 years.
• Africa, because of projected climate change impacts such as drought, water stress, reductions in crop yields and sea-level rise and Africa's low capacity for adapting to climate change.
• Asian and African megadeltas, due to their large populations and high exposure to sea-level rise, storm surges and river flooding.
• Small islands, where people and infrastructure are at high exposure to projected climate change impacts such as sea-level rise, coastal erosion and reduction of fresh water resources.

What about impacts in Europe?

Europe will not be spared. The IPCC expects nearly all European regions to be negatively affected by some future impacts of climate change and these will pose challenges to many economic sectors. Climate change is expected to magnify regional differences in Europe's natural resources and assets.

According to the new IPCC projections, the temperature in Europe may climb by a further 4-7°C this century in the absence of further global action to limit emissions of greenhouse gases.

Negative impacts across Europe will include increased risk of inland flash floods, and more frequent coastal flooding and increased erosion due to storminess and sea-level rise. The great majority of organisms and ecosystems will have difficulties adapting to climate change. Mountain areas will see retreat of glaciers, reduced snow cover and winter tourism, and extensive species loss - in some cases of up to 60% by 2080 under high emission scenarios.

In southern Europe, climate change is projected to worsen high temperatures and drought in a region already vulnerable to climate variability. Water availability, hydropower potential, summer tourism and crop productivity in general are expected to be reduced. Climate change is also projected to increase health risks due to heat waves and the frequency of wildfires.

In central and eastern Europe, summer precipitation is projected to decrease, causing greater pressure on water resources. Health risks due to heatwaves are projected to increase. Forest productivity is expected to decline and the frequency of peatland fires to increase.

In northern Europe, climate change is initially projected to bring mixed effects, including some benefits such as reduced demand for heating, increased crop yields and increased forest growth. However, as climate change continues its negative impacts - including more frequent winter floods, endangered ecosystems and increasing ground instability - are likely to outweigh its benefits.

What can we do about climate change?

We have to act on two fronts simultaneously.

The first is to take urgent action to halt the rapid rise in global emissions of greenhouse gases and then reduce them sharply. As the projections contained in the IPCC's Fourth Assessment Report underline, this is essential if we are to prevent climate change from reaching very dangerous future levels that could change the face of the planet.

The EU is adamant that global warming must be limited to no more than 2°C above the pre-industrial temperature. This will require global emissions to peak within the next 10-15 years and then be cut by at least 50% of 1990 levels by 2050. These reductions are very ambitious but the IPCC report backs the European Commission's analysis that they are both technologically feasible - using clean technologies already available or in the pipeline - and economically affordable.

The second front is adaptation. All sectors of society need to adapt to climate change because it is already happening - and it will continue to get more severe until we succeed in bringing emissions under control. By adapting, we can cope more easily with climate change and minimise its adverse impacts by anticipating them. Examples of adaptation measures include strengthening sea defences to protect against future sea level rise and developing new types of crops that can grow even in drought conditions. The Commission has launched a debate on options for EU action on adaptation through its June 2007 Green Paper on the issue.^[1]

Adaptation is no substitute for mitigating climate change by reducing emissions. The two complement each other and together can significantly reduce the risks from climate change.

What are the expected costs of climate change - and of action to control it?

The economic costs of climate change - and the economic advantages of taking strong and early further action to control it - have been highlighted by the 2006 Stern Review of the economics of climate change, commissioned by the UK government.

The Review underlines that the benefits of prompt action to reduce emissions far outweigh the costs, and that the earlier action is taken the less costly it will be. It estimates that allowing climate change to continue unabated would eventually reduce global GDP by at least 5% and possibly as much as 20% or more per year. The higher of these figures would have a devastating economic and social impact on the same scale as the Great Depression or the two World Wars.

By contrast, action to stabilise greenhouse gas emissions at a level that would prevent climate change from reaching dangerous proportions would cost around 1% of GDP if taken swiftly, the Stern Rerview estimates. The cost - and the risk of failure - would rise the longer action was delayed.

Analysis by both the Commission and the IPCC supports this assessment and confirms that limiting global warming to 2ºC above the pre-industrial temperature is fully compatible with sustaining global economic growth.

Investment in a low-carbon economy will require around 0.5 % of total global GDP over the period 2013–2030, the Commission's analysis shows. This would reduce global GDP growth by just 0.19 percentage points per year up to 2030, a fraction of the expected annual GDP growth rate of 2.8%. The IPCC puts the reduction in global GDP growth lower, at less than 0.12 percentage points a year up to 2050. Neither estimate takes account of the ancillary economic benefits of action such as greater energy security, reduced health costs and damage from avoided climate change.

These small decreases in annual GDP growth can be seen therefore as a modest insurance premium for significantly reducing the risk of irreversible damage from climate change.

What action is the EU taking to combat climate change?

The EU has long been leading international efforts to address climate change effectively. Preventing climate change from reaching dangerous levels is a strategic priority for the European Commission and EU Member States.

EU-level action is an essential complement to Member States' own efforts to reduce greenhouse gas emissions. Combating climate change is the first of the 6^th Environmental Action Programme's four priority areas and one of the main commitments made under the EU Sustainable Development Strategy. The need to reduce emissions has been progressively integrated into key EU policy areas such as agriculture, energy, regional policy and research.

• European Climate Change Programme

Central to this work is the European Climate Change Programme (ECCP), launched in 2000. Under this umbrella, the Commission, Member States and stakeholders have identified a range of cost-effective policies and measures to reduce emissions and reviewed existing measures to see how they could also contribute.

As a result of the ECCP the Commission has developed a range of policies and measures to cut emissions, including legislative initiatives to promote renewable energy sources for electricity production, improve the energy performance of buildings and restrict emissions from fluorinated industrial gases with a powerful global warming impact. By far the most important cross-cutting measure developed under the ECCP has been the EU Emissions Trading System (EU ETS). Launched in 2005, this restricts CO2 emissions from some 10,500 energy-intensive installations in power generation and manufacturing industry.

While the first phase of the ECCP focused on developing measures to ensure the EU and Member States meet their Kyoto Protocol emission targets for 2008-2012, a second ECCP was launched in October 2005 to identify further cost-effective measures to reduce emissions up to and beyond 2012 and to develop strategies for adapting to climate change. This work has led, inter alia, to the Commission's proposals to include aviation in the EU Emissions Trading System from 2011 and to strengthen the EU strategy for reducing CO₂ emissions from new cars through legislation

Other areas of ECCP II work include a review of the EU ETS to prepare the ground for strengthening and expanding the system from 2013, the development of a legislative framework for the environmentally safe use of carbon capture and geological storage technology, and the development of the June 2007 Green Paper on adaptation to climate change.

• New energy policy for Europe

In January 2007 the Commission put forward an integrated package of measures to establish a new energy policy for Europe focused on stepping up the fight against climate change, boosting the EU's energy security and competitiveness and putting Europe on the road to becoming a low-carbon economy. The package sets ambitious targets for greenhouse gas emissions and energy use, to be met by 2020, which were endorsed by EU leaders at their European Council meeting in March 2007. It has further cemented the EU's international leadership on climate change and set the agenda for further global action.

On emissions, the EU is proposing that developed countries commit, under a new global climate change agreement, to reduce their collective emissions to 30% below 1990 levels by 2020. The EU is ready to do so if other developed countries agree to make a comparable effort. Pending negotiations on a new climate change agreement, the EU has underlined its determination to see firm international action by making an independent commitment to cut its emissions by at least 20% over the same period.

This reduction would be achieved through a combination of existing measures, in particular the EU ETS, plus new energy-related targets to be met by 2020: a 20% reduction in energy consumption through major improvements in energy efficiency, an increase in renewable energy sources' share of the energy market to 20% (from 6.5% today), and an at least 10% share for sustainable, second-generation biofuels in petrol and diesel.

Over the coming weeks the Commission intends to follow up by bringing forward legislative proposals to implement the emissions, renewables and biofuels targets, revise the EU ETS, promote the use of carbon capture and storage technology and reduce CO₂ emissions from new cars.

Europe's drive towards a low-carbon future will be further underpinned by the Strategic Energy Technology Plan presented by the Commission on 22 November 2007.

What progress is the EU making in reducing emissions?

The EU's greenhouse gas emissions are falling due to the combined impact of policies and measures resulting from the European Climate Change Programme, domestic action taken by Member States and the restructuring of European industry, particularly in central and eastern Europe.

These factors have enabled the EU to 'decouple' emissions from economic growth.

The 'EU-15' Member States reduced their collective emissions by 2% between the base year (1990 in most cases) and 2005 while the economy grew by more than 35% over the period. EU-25 emissions were down 11% over the same timeframe. These reductions compare, for instance, with a 16.3% rise in US emissions between 1990 and 2005 as the US economy expanded by 54.7%.

Under the Kyoto Protocol the EU-15 are committed to reduce their collective emissions in the 2008-2012 period to 8% below base year levels. Latest projections from Member States indicate that measures already taken, together with the purchase of emission credits from third countries and forestry activities that absorb carbon from the atmosphere, should achieve a cut of 7.4% by 2010. Additional policies and measures under discussion at EU and national levels will allow the target to be reached, and could even take the reduction to as much as 11.4% by 2010, if implemented promptly and fully (see Annex).

What international agreements are in place to fight climate change?

The United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol provide the international framework for combating climate change.

• UNFCCC

The UNFCCC, the first international measure to address climate change, was adopted in May 1992 and came into force in March 1994. So far 192 Parties - 191 governments and the European Community - have ratified it.

The Convention's goal is to stabilise greenhouse gas concentrations in the atmosphere at a level that prevents dangerous human interference with the climate system. It obliges Parties to establish national programmes for reducing greenhouse gas emissions and to submit regular reports.

It also encouraged industrialised countries to stabilise their greenhouse gas emissions at 1990 levels by the year 2000. The EU comfortably met this target.

The UNFCCC is based on the principle of 'common but differentiated responsibilities and respective capabilities'. This recognises that while all countries have in interest in controlling climate change, the developed world should lead in reducing emissions since it is responsible for most of the historical build-up of greenhouse gases and also has greater economic resources to address the issue.

Parties to the UNFCCC meet annually to review progress and discuss further measures. Their next meeting will take place from 3 to 14 December 2007 in Bali, Indonesia. A number of global monitoring and reporting mechanisms are in place under the UNFCCC to keep track of greenhouse gas emissions.

• Kyoto Protocol

In December 1997 governments took a further step to address climate change by adopting the Kyoto Protocol to the UNFCCC.

Building on the UNFCCC framework, the Protocol sets legally binding limits on greenhouse gas emissions from originally 38 industrialised countries and the European Community (the EU-15). It also introduces innovative market-based implementation mechanisms - the so-called Kyoto flexible mechanisms - aimed at reducing the cost of curbing emissions.

Under the Protocol, industrialised countries are required to limit or reduce their emissions of six greenhouse gases: carbon dioxide (CO₂), the most important and common gas, methane, nitrous oxide, and industrial gases called hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. The overall reduction required amounts to a cut of around 5% below the level in the chosen base year (often 1990), and is to be achieved during the Protocol's first "commitment period" from 2008 to 2012. There are no specific emission targets for developing countries.

The EU-15 (the 15 countries that were members of the EU at the time of ratification of the Protocol in 2002) took on a commitment to reduce their combined greenhouse gases emissions to 8% below base year levels (1990 in most cases). Under the EU Decision to ratify the Protocol, this collective target has been translated into differentiated, legally-binding national targets for each EU-15 Member State, ranging from a reduction of 28% by Luxembourg to an increase of 27% for Portugal. Of the 12 Member States that have acceded since 2004, 10 have individual reduction commitments of 6 or 8% under the Protocol. Only Cyprus and Malta do not have Kyoto targets.

The Kyoto Protocol entered into force on 16 February 2005. So far 175 countries and the European Community have ratified it. Two developed countries that originally signed the treaty, the US and Australia, have not ratified. This means the Kyoto emission targets currently apply to 36 developed countries plus the European Community (EU-15). However, new Australian Prime Minister-elect Kevin Rudd, winner of the 24 November general election, has pledged to reverse the previous government's position and make Kyoto ratification a top priority.

What are the Kyoto flexible mechanisms?

The Kyoto Protocol creates three market-based mechanisms, known as the Kyoto flexible mechanisms: emissions trading between governments with Kyoto targets, the Clean Development Mechanism and Joint Implementation.

The aim of these mechanisms is to allow industrialised countries to meet their targets cost-effectively while stimulating investment in, and the transfer of clean technology to, emissions-saving projects in developing countries and economies in transition. The rationale is that emission reductions have the same impact on the atmosphere regardless of where they are made, so it is sensible to make them wherever it costs least. Detailed rules and supervisory structures have been set up to ensure that these mechanisms are not abused.

• Emissions trading

Emissions trading can take place between countries with Kyoto targets, ie industrialised nations. Reflecting the emission targets agreed in Kyoto and under the internal EU agreement to share out the EU-15's 8% reduction among Member States, each country will be assigned a fixed maximum amount of emission (in tonnes) for the 2008-2012 commitment period. Countries that emit less can sell their unused emission units to others that emit more. This will allow reductions to take place where they are cheapest, reducing compliance costs.

Inspired by this model, the EU has developed and implemented its own company-level emissions trading system, the EU Emissions Trading System (EU ETS). This 'cap and trade' system, launched on 1 January 2005, covers all 27 EU Member States and is the first and biggest international emissions trading system in the world. It has developed rapidly and is now driving the fast-expanding global carbon market.

• Clean Development Mechanism and Joint Implementation

The Clean Development Mechanism (CDM) and Joint Implementation (JI) allow industrialised countries to achieve part of their emission reduction commitments by investing in emission-saving projects abroad and counting the reductions achieved toward their own commitments.

JI covers projects in other industrialised countries with Kyoto targets, while CDM projects are carried out in developing countries. The two mechanisms lower compliance costs for developed countries at the same time as channeling investment and clean technologies to developing countries and economies in transition, thereby supporting their sustainable development goals.

CDM credits can be generated retroactively, from 2000 onward, while JI credits will be generated during the 2008-2012 period. The CDM is thus already operational. A condition for the issue of credits is that the projects result in real, measurable and long-term emission savings that are additional to what would have happened otherwise. Several EU Member States intend to buy CDM and JI credits to help them meet their Kyoto targets. Collectively they have budgetted €2.9 billion to do so.

The EU ETS is linked to CDM and JI. Companies participating in the EU ETS can use credits from most types of CDM projects and from JI projects (from 1 January 2008) to offset their emissions, in the same way as they use emission allowances. This link is driving investment in CDM and JI projects by European companies, in addition to the purchases planned by governments.

What would happen if a country missed its Kyoto emissions target?

The compliance regime for the Kyoto Protocol is among the most comprehensive and rigorous in the international arena. If a Party fails to meet its emissions target, the Protocol requires it to make up the difference plus a further 30% as a penalty in the second commitment period (after 2012). It must also develop a compliance action plan, setting out the actions that it will take to meet the target and the timetable for doing so. In addition, its eligibility to sell emission units under the Protocol's international emissions trading system will be suspended.

For the EU-15 Member States, the Kyoto Protocol compliance procedures would apply only if the EU-15 as a whole missed its 8% reduction target. Should this occur, each Member State would be held to its target set out in the Decision to ratify the Protocol and the Community would be considered non-compliant.

The remaining 10 Member States with Kyoto targets (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) are bound to their individual targets as set out in the Protocol, both under the Protocol's non-compliance procedures and under EU law.

Member States are committed under EU law to meet their targets, which are enforceable through infringement procedures by the European Commission.

What will happen after Kyoto's first commitment period?

Talks among the UNFCCC and Kyoto Protocol Parties on options for post-2012 action were launched two years ago. These include an informal dialogue process under the UNFCCC and formal negotiations on post-2012 targets for developed countries under the Kyoto Protocol. But at present no comprehensive formal process exists to negotiate a new global climate agreement to take effect when the Kyoto Protocol's first commitment period expires at the end of 2012.

Since time is getting short to negotiate, ratify and implement a new agreement, and in the light of the alarming findings of the latest IPCC report, the Commission and EU Member States strongly favour starting formal negotiations on a global and comprehensive post-2012 climate change agreement at the earliest opportunity.

For the EU it is therefore imperative that the next UN climate change conference, taking place from 3 to 14 December 2007 in Bali, reach consensus to launch these negotiations and fix an end-2009 deadline for completing them so there is enough time to ratify the new agreement before the end of 2012. The window of opportunity to keep global warming below 2°C is narrowing as temperatures rise, and the costs associated with climate change will keep increasing the longer further action is delayed.

What are the European Commission's proposals for further action to combat climate change?

The key elements of the EU's position on further action were set out in a Communication published by the Commission in February 2005 and were endorsed by EU leaders the following month. They are:

• Broad participation, ie by all major emitting countries
• Inclusion of all emitting sectors, including aviation, maritime transport and forestry (to address deforestation)
• Increased research and development and uptake of low-carbon technologies
• Continued use of market mechanisms to keep emission reduction costs low
• Adaptation to climate change since some effects are unavoidable.

The Commission's January 2007 package of climate and energy measures builds on this earlier work. It included a Communication setting out concrete proposals for the content of a new global climate change agreement aimed at limiting global warming to no more than 2°C above the pre-industrial level. This objective, and the emission reduction targets needed to achieve it, were endorsed by EU leaders at the March 2007 European Council meeting.

Company-level emissions trading systems such as the EU ETS will be a key tool to ensure that developed countries can reach their future emission targets cost-effectively. The international framework for combating climate change after 2012 should enable compatible trading systems in different regions to be linked together. This goal will be supported by the recently-launched International Carbon Action Partnership (ICAP), of which the European Commission and several EU Member States are founding members.

In addition, the scope of the Clean Development Mechanism should be expanded after 2012, for instance to cover entire national sectors in developing countries rather than individual projects. Emission reductions by developing countries are perfectly feasible without undermining their economic growth or poverty reduction policies. The Commission estimates that implementing policies to control emissions would reduce the overall GDP growth of developing countries in 2020 by only a very small amount, and this is without taking account of co-benefits such as the avoided impacts of climate change. Many policy options are available to developing countries whose benefits can outweigh the costs, for example increasing energy efficiency, promoting renewable energy, improving local air quality or capturing methane from sources such as landfills as a cheap source of energy.

What are the EU's priorities for the Bali climate conference?

As stated above, the EU's top priority is to ensure consensus is reached in Bali to launch UN negotiations on a global and comprehensive climate change agreement covering the period after 2012. An end-2009 deadline should be set for completing the negotiations so the agreement can be ratified and implemented in time to enter into force before the end of 2012, when the Kyoto Protocol's first commitment period finishes.

To achieve this, the EU wants the conference to define a 'Bali Roadmap' setting out the main components of the future agreement on which the forthcoming negotiations should focus. This should include a 'shared vision', setting a level of ambition for the future agreement. In view of the scientific evidence from the IPCC and others, the EU is adamant that the shared vision must be to limit the global average temperature increase to no more than 2ºC (3.6ºF) above the pre-industrial level. This will require global emissions to peak within the next 10-15 years and then be cut by at least 50% of 1990 levels by 2050. These reductions are very ambitious but the IPCC's recent Fourth Assessment Report backs the European Commission's analysis that they are both technologically feasible - using clean technologies already available or in the pipeline - and economically affordable.

The other building blocks proposed by the EU are as follows:

• Deeper mandatory absolute emissions reductions by developed countries. In order to respect the 2ºC limit, the EU is proposing that developed countries collectively reduce emissions 30% by 2020 and 60-80% by 2050 compared with 1990 levels. Pending agreement on this, the EU has made an independent commitment to reduce its own emissions by at least 20% by 2020.
• Fair and effective contributions by other countries, especially the rapidly emerging economies, to limit the emissions intensity of their economic growth.
• Strengthening and extending the global carbon market, including through innovative and enhanced flexible mechanisms. The EU ETS has shown that the carbon market works.
• Increasing cooperation on research, development and deployment of the clean technologies needed to reduce emissions.
• Enhancing efforts to address adaptation to climate change. Cooperation to tackle the unavoidable impacts of climate change needs to be strengthened, particularly to help the poorest and most vulnerable countries.
• Addressing emissions from international aviation and shipping. The EU is already discussing the inclusion of aviation in the EU ETS.
• Reducing emissions from deforestation, which is responsible for up to 20% of global CO₂ emissions.

The discussions on post-2012 action launched two years ago should now be turned into concrete negotiations. One 'track' of the discussions has been an informal dialogue on long-term cooperative action among the Parties to the UNFCCC, including the US which has not ratified the Kyoto Protocol. The outcomes of this dialogue will be reported back in Bali and the EU wants to see it followed up by a formal negotiating process covering all the building blocks of a future agreement. On a second, parallel track the Parties to the Kyoto Protocol are already negotiating new emission reduction targets for industrialised countries to succeed the 2008-2012 targets. This track should continue and be complemented by a process that enables a full review of the Kyoto Protocol. The EU favours the creation of an ad hoc working group to follow up on the informal dialogue through concrete negotiations on options for further action post-2012, while also ensuring the coordination of, and synergies between, the work done under the two tracks.

In addition to the decisions on future action to reduce emissions, the EU will be pressing for agreement on operational arrangements for the Kyoto Protocol's Adaptation Fund so that adaptation projects to help vulnerable countries adapt to climate change can be implemented as soon as possible. This fund, financed by a 2% levy on credits from emissions-saving projects carried out under the Clean Development Mechanism, plus voluntary contributions, could be worth more than €350 million between 2008 and 2012.

The Bali conference will start on 3 December and end with a high-level segment on 12-14 December. This will be preceded on 8-9 December by a meeting of trade ministers and on 10-11 December by a meeting of finance ministers. The meeting of trade ministers offers an important opportunity to promote a positive relationship between the climate change and trade agendas, in particular ways and means in which trade rules and policies can help tackle climate change and avoid any possible conflicts between the trade and climate regimes. The finance ministers' meeting will focus attention on options for redirecting and scaling up global investment in low-carbon technologies. The EU is committed to doing more to mobilise the necessary finance, including through the expansion of the global carbon market and instruments such as the Global Energy Efficiency and Renewable Energy Fund (GEEREF).

In Bali the Commission will be promoting its initiative to build a Global Climate Change Alliance with the poorest developing countries, which will be the most affected by climate change but have the least capacity to cope with it

ENDS

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