Welcome to the Dahrendorf blog! As part of the Dahrendorf Symposium, held on 14-15 November 2013 in Berlin, EUROPP hosted a series of articles from contributors to the Symposium. This page collates all of the material from the series.
The Dahrendorf Symposium
The urgent need for effective action and implementation as well as capacity building for tackling with climate change
In a world where climate change, defined as global warming of more than two degrees Celsius, is often debated but not effectively addressed, the European Union as a politically responsible actor should adopt a more constructive and proactive approach that could also set a benchmark for others. One of the key components and missions of the EU has always been to set a higher standard of life quality within the EU while also raising the bar for the others as a ‘best practise’, through partnerships. Environmental policies, in this respect, have been included in the EU agenda as a tool for reaching a better and a more sustainable way of living.
As the domain of climate change increased its presence over the years in the political, economic and social justice rhetoric of the EU with increasing awareness on the issue almost creates a feeling of optimisim for fighting against the threats and outcomes that the climate change brings. As Connie Hedegaard, European Commissioner for Climate Action stated during her speech in the Dahrendorf Syposium regarding EU’s action plan for tackling climate change, things are moving really slowly but they are moving in the right direction.
But the bigger question here is that whether the measure that have been taken so far were adequate? Has there really been sufficient deliberation, both officially and non-governmentally? And most importantly has the EU made enough progress? Or are we running in circles, even with the best intentions at heart? The 2013 Dahrendorf Symposium was looking for answers to these questions. To sum up the common point derived from the keynote speeches, I would like the quote from Craig Calhoun the director of LSE, on the importance of a European leadership while tailoring effective policies targeting climate change. The biggest challenge that lies ahead of the EU regarding climate change is probably generating effective solutions that ensure an overall participation of all its members while engaging with other states for a better agreement on the actual and sustainable implementation of environmental policies to protect the future generations. We need to decide urgently is Europe as a political domain with the best intentions but with the weakest incentives to take action? Or a true leader in encouraging policy outcomes on a global and operative level for overcoming climate change?
Let’s take EU’s Emissions Trading Scheme as a sample case to reveal how far the EU has come in achieving its goals while combating the climate change. ETS here is actually a very important pillar of EU’s environmental policy and a good testing ground for us to see how effective EU policy making works in meeting targets. The current cap is set to fall by 1.74% annually to achieve a target of reducing emissions in 2020 to 21% below their level in 2005, when ETS was first introduced.
Such a broad policy on reducing carbon emissions has never been implemented before ETS. So it was a pioneering initiative of the EU to regulate the carbon market while also mandating companies to finance and assume responsibility on their end of the bargain to avoid pollution. This way the consumption of fossil fuels would be dwindling and the companies would be reaching out for more green alternatives. However the very implementation of the ETS also became a clear and stark demonstration of the inconsistencies between climate goals and energy policies.
As Richard Folland is JPMorgan’s London-based advisor on EU energy and environmental policy and regulatory issues stressed during the Dahrendorf Symposium, low carbon prices are undermining the credibility of the European climate change policies diverting companies and producers from “over-priced” green energy to cheaper and more profitable bargain of low-price carbon alternatives with also supported with over-supply of carbon credits available.
Furthermore, EU member states’ individual and arbitrary energy market regulations are also greatly contradicting with the EU’s goal of initiating and leading the combat against climate change, starting from the level of the implementation of the ETS. For example Germany is providing a great deal of financial support for the construction of new coal plants whereas Britain offers generous tax concessions for oil and gas exploration while a majority of the politicians oppose the ‘green taxes’ and the ‘decarbonisation’ process of the electricity production as it will be costly for the current economy.
Either on the company/producer level or the policy making level EU’s incentive for targeting climate change has not yet been sufficient despite many encouraging initiatives. The failure of optimisim and enthusiasm at the climate change negotiations in Warsaw Summit 2013 is also revealing for the lack of a driving force at the EU level combating the results of the climate change. The summit was crucial because it was also a missed opportunity to demonstrate EU’s determination for eliminating the factors contributing to climate change such as increasing carbon emissions and fossil fuels. In addition to it, it was a testing ground for EU’s prominence for combating climate change right before The UN Climate Change Summit that will be taking place in Paris in 2015, where the EU would be setting a ‘good – example’ of taking an initiative and implementing it rigorously and sharing the experience as well as promoting it on a more global scale.
The EU is still a key actor to become a leader and catalyser for generating effective solutions and policies for tackling the climate change. But that potential will be realized only if governments actively pursue sustainable and consistent green policies. The EU clearly needs a consensus and determination to align the policies against the consumption of fossil fuels and carbon-intensive energy – including taxes, carbon markets, and support for green alternatives by shifting the price support mechanisms to more environmental energy sectors.
As Professor Reinhard Loske rightly stated, ‘if you stressed the secondary benefits of climate change policies you undermine the true value and essence of it’. The biggest challenge that lies ahead for the EU in that sense is to take the leadership for an overall transformation of the energy and environmental policies that are consistent with the goals of combating climate change and implement them rigorously. That is the ultimate goal of the very foundation of the EU as global actor. Such a task would also meet the goal of providing our future generations a more sustainable and better world with a higher quality of living, while abolishing poverty caused by the catastrophies of climate change such as deadly storms, floods or droughts.
Videos of the Symposium’s keynote speeches are available here
The success of the EU ETS is a crucial issue for the EU as it represents a local fight not only againstclimate change, but also for the future of Union’s climate policy. Therefore, to date European policymakers seem to be concerned by the emissions market much more than businesses. Such an image is maybe not the best appearance for a measure claimed to be a totally market-based and not a command-and-control one.
Current flaws of EU ETS and prospective rise of greater pan-Asian-Pacific carbon market
It was initially projected that the EU ETS would reduce GHGs emissions, and also that the declining cap would give rise to a price signal to generate low-carbon investments. In 2011, total CO2 trading was about EUR100 billion annually, and more than 80% of the global carbon market was covered by the EU cap-and-trade. The 2013 studies on the past trading year say that the total value of carbon allowances traded in the system was around EUR60 billion (down from about 100 billion in 2011!), and virtually all this activity (around 90%) was in Europe.
The puzzling part of the story is that the initially projected CO2 price is eight times lower than the actual market carbon price, i.e. EUR5 in June 2014, rather than previewed EUR40/tonne of carbon. What are the reasons for such ‘miscalculating’? In the first EU ETS trading period the CO2 price collapsed to zero as a result of overallocation of allowances. In the second phase (2008-2012), the carbon price just started to rise – up to EUR30/tonne in June 2008 – but was severely hit by the recession; the price has not fallen to zero but was floating between EUR6 and 7. In late January 2013, the EU carbon price fell to a new record low of EUR2.81, following the Energy and Industry Committee of the European Parliament opposition to a proposal to withhold 900 million future-dated allowances from the market.
Following Dales’ Pollution, Property & Prices, since the 1970s, many started seriously thinking that self-regulating markets alone were the solution for such complex problems as climate change. But 2014 empirics demonstrate that taking the carbon markets completely out of context and away from society is a tremendously arduous feat.
One of the most tangible examples is the EU Aviation Directive, based on the EU ETS. That is, in October 2013, the International Civil Aviation Organisation (ICAO) member-states somehow saved the EU’s ‘self-regulating’ carbon market by passing a resolution – so, a soft law instrument – to develop by 2020 a global market based measure (MBM) applying to global aviation emissions. The resolution foresees to implement the global MBM for aviation at the next ICAO Assembly in 2016.
Taken together with the above figures, it appears that in 2014, regulatory interventions, diplomatic pressure, and recourse to soft law are necessary both for mitigating opposition trends against global emissions trading and for reanimating that market, as well as for guaranteeing the minimum of its regularity. So, it could be that it is not the situation which can be solved by markets, as presumed by Dales and his followers, but quite the opposite: the carbon market could be solved – or saved (or not) – by the situation, if you will.
On the other hand, looking beyond the EU carbon market, to date ETS legislations already exist in Australia, New Zealand, Kazakhstan, South Korea, and some schemes other than emissions trading are legislated in the US, Canada, and Japan. That is, Australia plans to link to the EU emissions trading in July 2015; it has also announced collaborating with New Zealand, China and South Korea to jointly develop a kind of bilateral emissions systems. South Korea is expected to launch its ETS around January 2015.
So, it looks like carbon trading is beginning to gain traction in the greater Pan Asian-Pacific area. With certain degree of convergence, these ETSs could one day create a single regional carbon market. And this one would probably be more efficient and less vulnerable to all sorts of economic distortions, as today each system develops locally in learning from the EU’s mistakes. Ifone daythey link with one another, this global market network could generate new and far greater emissions allocation demand, and would also be able to digest local economic distortions and global market swings, hence addressing disparities, and creating profits… However, whether such profits will be equally distributed is a question which is most probably beyond pure market logic.
A normative regulation through a market-based measure?
Almost ten years ago, when the first ETS had been implemented locally in the EU, the goal was to create a global system aimed at increasing the costs of pollution, hence urging industrial polluters to ‘go greener’. When the carbon price had just started to rise and reached up to EUR30/tonne in June 2008, billions of euros had been invested in green energy alternatives. But, by the year 2014, it seems cheaper for virtually any stationary industry to grow, emit more carbon, and pay extra allowances, than to ‘go greener’.
Obviously, the downfall of carbon prices in the European ETS is bad for the EU’s climate policy and the global carbon market, no matter how the story ends. But, on the one hand, for emissions trading proponents, there is, as mentioned, a hope for a greater pan-Asian-Pacific carbon market to be installed in the near future. On the other hand, the situation within the EU is even simpler (which doesn’t mean better): in any event, while the EU ETS is at present in big trouble, its carbon market is not likely to disappear altogether for a very practical reason – relevant European operators, among others, in aviation, now must buy the credits simply in order to comply with EU binding regulation.
Actually, emissions trading is a market model which was theorised by a Canadian (Dales), first supported by the Americans (the U.S. SO2 Cap-and-Trade Programme), then went through an intergovernmental network (OECD), was subsequently taken up by an international organisation (the United Nations, namely the UNFCCC), then finally dropped by the Americans, but taken up by the Europeans- at the point that it became part of EU law, and now is eventually becoming a global ICAO norm regarding international aviation emissions. What an example of new generation normativity!
Another prominent feature of ETS regarding relevant current global talks within the ICAO as well as proposed global aviation MBMs network is that it represents an example of a normative regulation through a market-based measure, so, a regulation by the market, without creating a proper structure of governance. However, even without a structure of governance in the traditional sense, this normative regulation seems to somehow regulate. It is asserted by some commentators (like Benoit Frydman) that the difference between the market normativity and the legal one is that while the latter would highlight (and maybe condemn) inequalities and externalities, the former would rather dissimulate those.
The EU Aviation Directive seems to represent a workable example in that respect, as it is the market that actually applies to rules and not vice versa. Indeed, on the one hand, the carbon market, initially designed as a place of execution of environmental objectives fixed by public authorities of states, becomes the place of political negotiation between the most powerful stakeholders determining in the last instance the highest pollution reduction levels and emission ceilings. However, since the market is a very particular normative tool with its proper – ‘market’ – logic, we will haveto prepare ourselves for certain specific consequences of the regulation by the market.
Finally, and consequently, our results raise some worrying concerns about future trends of such an actual normative regulation by the market – matters that are outside of the scope of the present note, but should be considered in the near future. Namely, such a regulation could and should be tested by a number of democracy-based, re-distributional justice, and sustainability questions, which would hopefully lead to a more systematic, equitable but differential and pluralist approach to carbon trading, and the fight against climate change more generally.
With its gentle hum of cerebral conversation, civilised surrounds and spirit of common purpose, there was much at the Dahrendorf Symposium to evoke Robert Kagan’s old observation: ‘Americans are from Mars, and Europeans from Venus’.
This was the supposed ‘soft power superpower’ in action; civilian Europe applying scientific debate, academic discourse and political multilateralism to the climate change problem. Ideas were shared, mulled over, scrutinised. ‘Cooperation’ was a watchword. A general sense of solidarity pervaded (a few gentle jibes at British truculence aside). Even the setting seemed apt, speakers taking the stage framed against a backdrop of the Brandenburg Gate – memorial to a bloody past, witness to a divided city, and symbol of a united future. Panels addressed the challenge of environmental change in all its facets: economic, social, legal and more.
All, that is, except that aspect most prominent in recent debates on the American side – this Martian notion of climate change as, above all, a threat to national security.
That the security dynamic was so absent from Dahrendorf discussions should not be surprising. The Symposium rightly tried to make the climate change debate one about inclusion – about societies not just states, about common humanity, about people. Europeans, after all, are from Venus. The securitised account, meanwhile, relies on tropes that do not sit easily with this narrative; emphasising the national over the international; self-interest over common purpose; realist competition over idealist collaboration.
Yet the national security account of environmental change has been gaining momentum rapidly in recent years and months. Addressing a Jakarta audience on his latest Asian tour, US Secretary of State John Kerry said climate change ‘can now be considered another weapon of mass destruction, perhaps the world’s most fearsome’. The environment joins a growing roster of transnational threats that have contributed to a radical widening of the security agenda – away from concern over rival state militaries to new worries over terrorism, organised crime, proliferation, poverty or even HIV/AIDS.
In some regards, this shift represents a throwback to the vogue for ideas of ‘environmental security’ in the 1990s, where a post-Cold War commentariat looked to resource scarcity as an explanation for violent conflict in developing countries. In this narrative, mismanagement or shortages of key resources bring competition, tension and eventual violence between states. Conflict can also be internal, scarcity turning rival groups against one another within fragile societies. This schema gained widespread popularity and notoriety in 1994, Robert Kaplan predicting a spiral of violence across Africa in his ‘The Coming Anarchy’.
As Chad Briggs notes, ‘Kaplan’s mistake, and that of most environmental security researchers in the 1990s, was in conceiving environmental change and degradation as merely local issues in less developed regions’. The tendency was to blame developing countries for both violence and resource scarcity, rather than examining the deeper injustices in global regimes of trade, politics and climate management that leave the world’s poorest areas so fragile in the first place.
The recent trend improves on these old ideas of environmental security in three important ways. Firstly, it offers a much more nuanced understanding of the origins of conflict. The simplistic narratives of the past have traditionally overstated the influence of resource scarcity as compared to communal animosity, political exclusion and other such triggers for conflict. Indeed, they have often overlooked the fact that the inverse hypothesis can be true: that resource abundance, of lootable commodities like diamonds, oil or narcotics, can be every bit as destabilising as resource scarcity.
Secondly, reaching for a more balanced view of environmental change as a ‘threat multiplier’ – rather than a cause of conflict all on its own – not only offers a more intelligent account of the origins of war, but also helps exorcise the rather colonial suggestion that while the West can fight for reasons of high politics or principle, the developing world must be driven only by base motives of survival or greed.
Thirdly, new notions of environmental security no longer provide political leaders the convenient – and fallacious – excuse that mankind’s actions are futile in the face of immovable, inscrutable Nature. Where older narratives of environmental security focused on apparent environmental constants (number of resources, inevitability of natural disasters etc), new accounts of environmental change place humankind at the centre of the story, encouraging accountability and action. Vitally, too, they recognise that the security repercussions of climate change are not just local to the developing world, but rather constitute a tangible danger to Europe and the West.
Most directly, shifts in climate constitute an explicit physical threat to critical military and civilian infrastructure. Climate events bring essential energy, food and water supplies under threat; open up new arenas of potential conflict, as in the melting icecaps of the Arctic; distract militaries with new mission types, as in the British Army’s recent manning of flood defences; and place heightened logistical strain (and thus financial cost) on military operations.
Climate change also threatens to exacerbate existing tensions in Europe’s backyard. Fragile societies and disaffected communities in many parts of North Africa and the Middle East are often those worst placed to mitigate the effects of environmental change. It was here that the last of the Dahrendorf Symposium’s panels – exploring Europe’s role in the world – touched briefly on the issue of security for the first time; acknowledging quickly the threat of climate refugees, mass displacement and conflict should climate change undermine food, water or energy security outside Europe’s southern borders.
Given the scope and scale of these challenges, a bigger voice is needed for security concerns in the European climate change debate. Fleeting acknowledgement is not enough. Politicians, academics and future Dahrendorf attendees alike need to move past their understandable and well-intentioned reluctance to admit the European community is not one founded solely on idealistic notions of solidarity, shared culture and unity for the common good.
It is also one where national security self-interest can at times be the greatest impetus to collective governmental action – former President of the European Commission Romano Prodi noting wryly that ‘Osama bin Laden has done more for security cooperation in the EU than Jean Monnet’. The EU Satellite Centre in Madrid has already begun quietly combining idealistic environmental concerns with hardnosed security ones through its biggest satellite surveillance project, ‘Global Monitoring for Environment and Security’ (GMES). Far more work like this is needed, though, to break down the artificial and self-defeating divides that exist between doves and hawks; academics and policymakers; liberal commentators and conservative militaries.
If the next Dahrendorf Symposium hopes to effect real policy change, it must embrace the full spectrum of the climate change debate – and leverage ugly national self-interest, as much as it does more utopian notions of European solidarity, by giving the security agenda as much attention as the traditional economic, social and legal discussions.
If combatting climate change really is about saving the planet, then, key players on all sides would do well to remember it is not Venus we are trying to rescue, nor Mars. Saving Earth is going to require a more honest, less stovepiped debate.
As part of the Dahrendorf Symposium, being held on 14-15 November in Berlin, EUROPP will be hosting a series of articles framed around the symposium’s topic: ‘Changing the European Debate: Focus on Climate Change’. To kick off the series, Dahrendorf Academic Co-Directors Helmut K. Anheier and Arne Westad outline some of the main issues surrounding this year’s topic. Europe and […]
Ensuring a secure energy supply from Russia is a vital aspect of the EU’s strategy to tackle climate change
Energy has been an important underlying factor in the Ukraine crisis, with Russian gas […]
EU governments should place greater emphasis on infrastructure projects in their efforts to tackle climate change
The European Union has positioned itself as one of the most proactive global organisations […]
As part of our series on the Dahrendorf Symposium, which was held in Berlin on 14-15 November, Ben Ryan assesses the importance of the social and legal aspects of climate change, including the human victims of the process. He argues that Europe’s poor must also be recognised as potential victims of climate change, particularly through the spread of fuel poverty […]
Countries willing to act should address climate change through market-based solutions now – other countries will follow
What solutions should be used to tackle climate change? Ernst Ulrich von Weizsäcker writes that it is time to consider a market-based approach which makes polluting energy more expensive and encourages the creation of green jobs. He suggests that countries which are ready to engage in such policies should press ahead now, without international agreement, and that other countries will […]
Climate change discussions must move away from the green growth model and focus more on political and social change
The 2013 United Nations Climate Change Conference took place in Warsaw from 11 – 23 November. Nikolas Scherer writes that while most proposals to address climate change have been based on economic solutions, the issue also involves important political and social factors. He argues that the discussion must shift away from economic arguments to a more comprehensive approach to our […]
Five minutes with Connie Hedegaard: “Climate change is not an environmental issue to be parked in some corner – it has to be integrated into our economic growth strategies”
As part of our series on the Dahrendorf Symposium, Connie Hedegaard, the European Commissioner for Climate Action, spoke to LSE’s Conor Gearty on the EU’s approach to tackling climate change, how to respond to those who refuse to accept the science behind global warming, and the potential for Europe and the rest of the world to implement concrete solutions. How […]
Europe faces a number of problems in maintaining its energy supply, from climate change to the dependency on imported energy from outside of the EU. Günther H. Oettinger, the European Commissioner for Energy, outlines the main features of a proposed European energy strategy. He argues that energy challenges are among the greatest tests which Europe has to face, and that […]
Infrastructure and Climate Change
Revisiting Policy Recommendations for Mitigating Climate Change: Complementary measures to long-term infrastructure investments
It is overdue to appropriately react to climate change and we already know what to do to mitigate this dangerous phenomenon. These are two strong notions amidst the myriad of policy recommendations presented at the 2013 Dahrendorf Symposium aimed at questioning perceived wisdoms and broadening the climate change debate – a phenomenon which impacts us all, everyday.
Approaches to mitigate climate change continuously gain more salience, not only when natural disasters occur at seemingly regular intervals. Be it torrential rains and mudslides in Venezuela in 1999, the heat wave in Europe in 2003 or the recent typhoons in the Philippines in 2013. As loud as the domestic public outcry of an affected country or region after a catastrophe might be, behaviours, patterns and societal norms have not seen a significant shift away from prevailing norms, which are part of the problem. If we know that our lifestyle is unsustainable, what are the approaches to subdue climate change?
Reduction of green house gas emissions, increasing energy efficiency and the increased use of renewable energies remain the three main pillars by which the European Commission aims to mitigate climate change with its new 2030 framework. The third main objective of the Commission was questioned by Ernst Ulrich von Weizsäcker, who, inter alia, provocatively pointed out that it would be time to rethink “the false religion of renewables”. According to his point of view, the focus of climate mitigation efforts should lie on the demand for energy; the most efficient tool to steer the demand for energy would be its price. Implicitly, he stated that by increasing the price for energy, carbon emissions would decrease automatically.
Alone, this suggestion, firstly, leaves out another widely discussed topic on the Symposium: an increased price tag on energy would disproportionally affect the poor, who are already spending more of their household income on energy than more affluent households. Secondly, finding politicians, who resent lobbying efforts of corporations and businesses to introduce a trading scheme and potentially even apply an unpopular carbon tax to households, will prove to be difficult. Examples in Australia show that even a carefully crafted carbon-pricing scheme, primarily geared towards business with high emissions, is fiercely debated and disputed.
Part of the results of the Working Group on Infrastructure and Climate Change stressed that to save our environment, justly priced carbon dioxide emissions will not suffice. The infrastructure of a country determines crucially its energy mix and policy regime; changing infrastructure towards a lower carbon environment is costly and, more importantly, incurs long lead times and substantial time lags. The results of Eva Schmid and Brigitte Kopf show that pan-European grid expansion is always a “no-regret-option”. Constructing a pan-European grid is economically beneficial in terms of system costs and energy prices. Infrastructure investment in Southern European countries could give a much-needed impetus to their economies and would add a reconciling dimension to European integration.
Obstacles for these grand scale investments might not only be its funding and political distrust between states but also a lack of social acceptance of new grid projects. Time lags of these broadly encompassing infrastructure investments need to be accompanied by low-cost infrastructure interventions; chiefly the configuration of a more congruent transport system, which interlinks cycling, walking and smarter transit-oriented development. More and better-linked biking paths in cities combined with large-scale public bicycle, electric bike and car sharing systems are examples of low-cost infrastructure investments. These changes would bring benefits not only in the realm of climate change mitigation but also in the public health sector and general well being of citizens, since public transport trips could be combined with more active travel modes and since more short and medium distances could be travelled by a more active mode.
Another example for a climate mitigation approach, which could be implemented quickly and requires little to no additional public investment, is increasing the use of reflective materials in roofs and pavements. Approximately 80% of Western Europe’s population lives in cities today, pavements and roofs constitute over 60% of those urban surfaces. Using more reflective materials in roofs and pavements would increase urban albedo in cities, i.e. increasing the ratio of reflected radiation from a surface to incoming solar radiation, according to Dahrendorf contributors Tiziana Tusca and Felix Creutzig. This measure can counteract the increase in regional and local temperature.
Climate change mitigation is not a problem, which can be resolved in a mere top-down approach; rather, the process should be accompanied by policies, which encourage and foster social learning and social interactions. Because bike ridership has substantially increased as a consequence of a large-scale bike-sharing programme in Paris, these numerous riders will now advocate for further improvements to the cycling structure. Communication strategies, which go beyond simple pamphlets but pro-actively engage citizens, could tap the potential, which is already abundant in civil society. As stated above, citizens could be informed that an increase in urban albedo is a viable contribution to climate change mitigation; this measure could be easily integrated in urban building and maintenance plans. Energy suppliers could provide households and citizens with tailored information or regular feedback loops on their energy consumption, which decreases the latter by 5-15%.
Secondly, policies “can encourage firms to generate and utilize behavioural innovations” promoting better choices for consumers. The strawberry yoghurt, which travelled three times across the continent, should opaquely state its distance travelled next to its ingredients list. Once an appropriate carbon-taxing scheme is in place, the regionally sourced yoghurt would be the cheaper option and thus, be the smarter choice not only for environmentally conscious citizens. Personalised energy reductions options will also yield benefits through social interaction/spillover effect as stated by Frank Goetzke. The social environment directs people in certain directions; if it is common to have solar panels on one’s roof, one will also be more inclined to use this form of renewable energy.
In short, infrastructure is the broadly encompassing, frame-giving determinant for mitigating climate change. Developing and building lower carbon-emitting infrastructure is essential for climate mitigation; it takes a very long time and is very costly, however. Therefore an infrastructural change should be accompanied by measures, which show an impact in a shorter time span and are easier to implement. Social learning can leverage the full use of lower-carbon emission-oriented infrastructure, and can be best achieved by a communications strategy, which engages citizens beyond classic pamphlets. The change to a lower carbon-emitting infrastructure should also be complemented by relatively easy-to-implement measures with a shorter time lag such as increasing the urban albedo.
A video of the Symposium’s panel on Infrastructure and Climate Change is available here
Land value taxation could help to finance low-carbon infrastructure projects in cities suffering from austerity budgets
Many cities across Europe have had budgets for local services and infrastructure projects cut as a result of the financial crisis. Blanca Fernandez writes on the potential for land value taxation, in which taxes are collected on the basis of the value of land rather than simply on property, to help fund low-carbon infrastructure in cities. She argues that land […]
Designing roofs in European cities to reflect more solar energy would help prevent climate change, at little to no extra cost.
The amount of solar energy that is reflected by different materials can have a significant impact on temperatures, both at a local level and across the globe. As Tiziana Susca writes, cities generally have higher temperatures than surrounding areas, in part because the materials used in construction reflect less energy. She argues that by encouraging the construction of rooftops in […]
Government and Policy Aspects of Climate Change
Student briefing on Working Group 2: Government and Policy Aspects of Climate Change, by Alexandra Lafont
Dahrendorf Symposium 2013 – Student Briefing on the panel entitled “Government and Policy Aspects of Climate Change”
As the IPCC and repeating meteorological disasters remind us that we are at a climatic turning point, the panels of the Dahrendorf Symposium of 2013 discussed different aspects to be included in the debate of Europe’s role against climate change. What policies should be pursued to reduce greenhouse gas emissions effectively? What kind of governance structures are desirable to take efficient action against climate change?
The members of this Dahrendorf panel reflected on the optimal ways for the European Union to make decisions and achieve appropriate goals in order to take effective action against climate change. They focused on two countries with different economic situations and energetic mixes, Germany and Poland, concluding that power sectors as well as energy intensive industries should be at the core of policies.
They also questioned what would be accurate governance structures to plan and organise actions fulfilling these goals, how competencies and power should be distributed and how performance should be controlled.
As Kacper Szulecki presented it, the focus should be on energy efficiency in energy intensive industry and power sector, increasing the use of renewable energy and expanding the electric grid through grids interconnectors.
Increasing energy efficiency
Energy efficiency, as it was repeated during this symposium, remains the most cost-effective mitigation tool and shows a large potential. Although very much present in the European discourse, performance in matter of increasing energy efficiency differ from Germany to Poland for example. Apparently, energy efficiency of the Polish economy rose by 67% over the last two decades. While energy efficiency also increased significantly in Germany, it rose only slightly in the manufacturing sector, unlike Poland. These differences in performance can be explained by various situations and policy choices.
After the fall of communism, Poland needed to modernise its factories and power plants. Maciej Nowicki, former Environment Minister of Poland affirmed that during the last years, Poland could cut 30% of its CO2 emissions thanks to foreign investments favoured by the attractive condition of the Polish economy, bringing a majority of renovated plants to a state-of-the-art standard in technology.
Furthermore the escalation in energy prices in Poland (+75% between 2005 and 2013 according to Eurostat) created a strong incentive on energy intensive industries to improve energy efficiency. Meanwhile in Germany, due to the use of renewable energy, the energy prices increased by only 10% over the period, and the incentive was therefore weaker.
Finally, Lidia Puka, an analyst in the Polish Institute for International Affairs explains that the governance structures of the German power sector (four private companies) pushed to increase energy efficiency more than in Poland, with its four mostly state-owned power companies.
Policy diffusion: the German model of renewable energy policies
Germany has a visible role of “renewable energy policy promoter” outside of Europe. Can we expect a policy diffusion to Poland and Europe as a whole?
Renewables actually find a grassroots support in Poland: a survey lead by Polish municipality and community level administration affirms that civil society support more renewables than the central government does, preferring photovoltaic, wind and hydro power over coal and nuclear power. The government on the contrary tends to exaggerate costs of EU energy and climate policy, even questioning the whole idea of energy transition. When we look at the increase from 1.9% to 8.3% of the share of renewables in the Polish electric production between 2001 and 2011, we are tempted to attribute it to the German-Polish cooperation and call it a policy convergence, though other factors are at stake. We could conclude to a policy diffusion, yet it might come from the German influence on the European energy policy. It is no reason, not to encourage state cooperation, especially when Germany developed an expertise on renewables. Hertie School of Governance professor Claudia Kemfert put that Poland could benefit from the German experience and avoid bad communication. In Germany, disinformation on renewables “causing high energy prices”, caused a backlash of the public support for the energy transition.
The grid-lock paradox
As Claudia Kemfert recalled it, the intermittence of renewable energy in the grids makes them more fragile. Renewable energy is yet not always the cause, she declared that Germany experiences at the moment an oversupply of electricity because of the coal power plants. A solution to stabilise the grids would be to connect national electricity networks between themselves, to export and import electricity.
Lidia Puka explains that two interconnectors already exist between Germany and Poland. A third one was decided but, just like other interconnection projects, has not been made true yet. We can indeed state a stall in grid construction, a “grid-lock”. Why so?
Funding cannot be seen as the main problem, since return on investment has been proven, and the EU encouraged such “Projects of Common Interest”, promising a Mechanism for Electricity Interconnections in Europe.
One might rather charge the lack of coordination in governance and costly administrative: it is easier, quicker and cheaper for operators to centralise information, plan and organise actions on their own. Yet, we could imagine a central level giving incentives for investments, and a local level dealing with land tenure and environmental issues. The question of sovereignty is also crucial. The uncertainty and distrust to have access to energy remains a strong barrier to states’ cooperation.
The necessity of interconnections to stabilise the system should be emphasised: with the developing use of intermittent energy sources, keeping power systems autarchic becomes impossible, since electricity supply that cannot be consumed has to be evacuated from the grid, and will find a demand elsewhere in Europe. The EU should encourage best-practice sharing, building trust relationships to legitimise and push forward integration into a European energy market.
Next step: the European energy community?
The Council discussed in March 2011 the establishment of “a common energy market by 2014 to enhance economic performance, increase security of supply and facilitate the transfer to a low carbon economy”. Could this be the appropriate governance for a cost-efficient pan-European energy transition, including all relevant actors?
As explained above, there are different challenges to tackle to shape a common energy community: differences in policies, the grid infrastructure and voicing the appropriate political narrative.
The European level should be more of a framework providing goals and guidelines, making wise use of the subsidiarity principle, as states need flexibility to adapt. The EU could also provide a transparent assessment of economic benefits of the grid expansion, necessary to legitimise it in the political narrative. Finally, as Kirsten Westphal put it, climate policy should be coupled to energy security and poverty issues: mitigation projects should target low-income households, to fight the narrative saying that renewables make energy costs increase and burden the poorest.
Here is the governance problematic: constraining states’ energy policies, though leaving autonomy.
I believe the EU should, in parallel to its climate-energy framework, encourage cooperation initiatives (Nordic electricity market, Weimar triangle, Visegrad group), which deliver concrete results in terms of policy convergence. If the European energy community cannot manage harmonising energy mixes, at least it has to plan building pan-European infrastructures.
Far from driving businesses away from Europe, EU climate policy has the potential to generate future growth for European industry
A common criticism of EU climate policy is that it makes conditions more expensive for European businesses, which may encourage companies to relocate to other parts of the world. Andrzej Ancygier writes that much of this criticism is overstated. He argues that providing concrete long-term climate goals would provide more security for businesses, and that EU climate policy can also […]
Plans to create a pan-European electricity grid as part of the common energy market face a number of challenges before they can be realised.
In March 2011 the European Council formulated plans to create a common European energy market by 2014. However, as Lidia Puka and Kacper Szulecki write, a real common energy market will also require a pan-European electricity grid, with improved bilateral links between European countries. They note that despite presenting obvious benefits for participating states, attempts to strengthen cross-border connections between […]
Without strong German leadership, the adoption of an ambitious renewable energy policy across Europe will be impossible.
Debates are currently taking place over the EU’s energy and climate targets for 2030. Andrzej Ancygier and Kacper Szulecki note that Germany has so far kept an unusually low profile in the talks, which is at odds with the country’s active promotion of ambitious renewable energy and climate targets during its EU presidency in 2007. Using the case of Poland, […]
Social and Legal Aspects of Climate Change
Climate justice involves more than a fair distribution of benefits and burdens: It requires radical, structural change
As part of our series on the Dahrendorf Symposium, Anna Grear writes on the concept of ‘climate justice’. Broadly speaking, climate justice incorporates a view of the effects of climate change as an ethical issue relating to principles such as social and environmental justice. She argues that climate justice is best illustrated by focusing on the nature of ‘climate injustice’, […]
Moving from the principle of ‘common but differentiated responsibility’ to ‘equitable access to sustainable development’ will aid international climate change negotiations.
As part of our series on the Dahrendorf Symposium, Marcus Hedahl writes on international climate change negotiations. He notes that negotiations were initially carried out under the principle of ‘common but differentiated responsibility’, in which the developed world should bear the bulk of the responsibility for tackling climate change due to its historic emissions and greater financial resources. He argues […]
Those parts of the world which will be most affected by climate change must be allowed to participate fully in attempts to manage it.
Climate change will not affect all parts of the world equally, but will instead have a disproportionate impact on specific geographical areas and populations. Marcus Hedahl writes that underlying social structures amplify this disparity, with the actors most responsible for causing climate change also possessing the greatest ability to mitigate its effects. He argues that those who are at most […]
Economics and Climate Change
Dahrendorf Symposium 2013 – Student Briefing on the panel entitled “Economics and Climate Change”
The Panel on Economics and Climate Change at the Dahrendorf Symposium 2013 presented an idea for creating a system of ETS pricing which is more responsive to changing economic circumstances, complementary policies and technological advancement. Such a system is based upon two dimensions: the degree to which management of the carbon market is delegated to an independent authority and the degree to which control of the permit price is increased. The proposed system would not set a pre-specified price; rather a ‘trigger’ based on a daily rate and past period trend would define how the independent authority acts. What is the proposed hypothesis, its characteristics vis-à-vis a standard market economy and secondary stock market, and its political feasibility among market participants today?
The current ETS system allows that, when the price for carbon emission permits rises too high over a six month period vis-à-vis a two year period, the Commission can respond by injecting new EUAs into the system. Injecting more permits into the marketplace will decrease the price per permit. Conversely, if the price for carbon emission permits decreases, a withdrawal of permits (by an independent body) from the marketplace will increase the price per permit. However, as of today, the ETS system does not allow for withdrawals on a ‘trigger mechanism’. The proposed system emanates from a current situation in which the price for EMAs began to plummet in January 2008, from €30 to €4.50, as of July 2013.
Theoretically, the environment would be better served when the price for emitting carbon is excessively high; companies would be swayed to find new ways to operate business functions, carbon-free. Conversely, when the price for emitting carbon is excessively low (as is the case today), businesses can purchase permits at low prices, store them for future use, and the price to save the environment is not high enough for companies to innovate. Hence, a responsive system is necessary, such as the one proposed by the panel and corresponding policy paper. How does the proposal act in comparison to a market economy and secondary stock market, comparatively speaking?
A market economy acts inversely in relation to the ‘trigger system’. When consumption and growth increase in a market economy at a faster rate during a shorter x1 period relative to a longer x2 previous period, how does an ‘independent’ body (government) react? There is a withdrawal of the money supply and an increase of interest rates. Conversely, when consumption and growth decrease at a faster rate during a six month period relative to a one year previous period, the same body injects money into the supply and lowers interest rates as a means to spur demand. Therefore, the system is the inverse of a theoretical market economy.
The policy paper entitled “System responsiveness and the European Union Emissions Trading System” of January 2014 discusses ‘auto-correction effect’ where businesses will expect an injection or withdrawal of permits based on company calculations; when an injection is expected, business with excess permits will sell, whereas businesses with a shortage will wait until the price of permits decreases. When a withdrawal of permits is expected, business with a shortage of permits will purchase, knowing the price will rise in the future and businesses with excess permits will wait and hold what they own. In this sense, the proposal by the panel is in fact operating like a secondary stock market, where market participants make decisions off of expected outcomes in the marketplace. The regulatory, independent body issuing permits acts as a company which chooses to sell or issue stock on a secondary market. Market participants are buyers and sellers of stock or EMAs, using market expectation as a point of reference to make future decisions. The underlying assumptions are entirely different, where EMAs are purchased as a future cost to do business, and secondary stocks are purchased to increase gains of holding a share in a company. Such characteristics must be understood by both market participants and independent, regulatory bodies in order to know how to make a system which can stabilize the price of emitting carbon amid exogenous shocks or unforeseen economic situations. How feasible is the proposal in reality and how can the theory be put into practice?
First, it must be mentioned that not all companies agree with the premise of climate change as a pervading issue in society; some companies are ‘laggards’ and will do everything possible to increase shareholders’ wealth, regardless if such actions are beneficial to the environment or not. Further, there is less consensus on whether the current low price of EUA’s is per se a problem that warrants regulatory reform, aiming at the direction about the purpose of the EU ETS (ibid.). Finally, how can an independent, regulatory body convince market actors as of today that the price for carbon permits is too low? In other words, market participants will be forced to pay higher prices for emitting carbon as of today, an idea that will be fought by all companies looking to increase profits. In the long term, the ‘trigger mechanism’ can create stable prices when situations would normally prove otherwise. However, companies do not necessarily think in such terms.
To what extent could a business be hurt (in short-term costs) because regulatory measures will dictate the price of carbon emissions? Specifically, a one-off removal of EMAs in order to raise the price can change company strategy as to the quantity and price of EMAs being purchased, held or sold. How does an independent body enforce new regulations? Finally, when a specific date is set for such a proposal, will there be a ‘buyers brigade’ (equivalent to a stock market), where market participants will purchase as many carbon permits as possible at a lower price before a new system is put into place? Such factors must be given consideration and be resolved before the system becomes operational.
How can the system such as this one be put into practice? Besides simulations, the system must be tested in a country in order to gain confidence among observers; once confidence is gained among those who watch the success (or setback) of the system, proper adjustments can be made and placed to a larger market. If there is a way to limit the number of carbon emissions through the permitting process without adversely affecting economic growth, such a plan would gain traction among particular Member States within the EU. A collaborative effort between regulatory bodies and businesses is the conduit which will drive economic prosperity and maintain a healthy environment for both today and tomorrow.
A video of the Symposium’s panel on Economics and Climate Change is available here
Australia’s rejection of carbon pricing would be a blow for EU efforts to link Europe’s emissions trading scheme with other parts of the world.
The EU has attempted to tackle climate change through an emissions trading scheme, and has hoped for its scheme to become the core of an international system of linked-up carbon markets. Frank Jotzo writes on developments in Australia following the country’s recent election. He notes that the new government, led by Tony Abbot, is committed to repealing Australia’s carbon pricing […]
Europe and the World
Dahrendorf Symposium 2013 – Student Briefing on the panel entitled “Europe and the World”
The fifth and last working group at the November 2013 Dahrendorf Symposium on Climate Change aimed to broaden the debate on this subject by highlighting the intricate links between climate change and other trends and processes that are changing the very nature of world politics. The speakers showed how Europe relates to these sweeping new developments and looked at what role it could potentially play in the future in the new globalized and multipolar world order that is gradually emerging in the 21st century.
The first speaker, Helmut K. Anheier, focused on the question of Europe’s place in the world. He challenged the supposed uniqueness of the European way of life, and asked whether Europe was “losing its way” in the world, absorbed by the tidal wave of globalization. Is the European “model” still relevant in a globalized world? While Europe has undoubtedly been strongly impacted by the rising tide of globalization, there are still several areas where the “European model” remains distinct. For example, Europe has managed to combine a competitive liberal market economy with the notion of social justice, with many EU member states boasting the most comprehensive and developed welfare systems in the world. Moreover, European countries have made substantial efforts to protect their unique and rich historical cultural heritage, which continues to attract nearly two hundred million tourists each year.
The second speaker, Senem Aydin Duzgit, further developed the issues raised by the first speaker in asking whether the current economic crisis had discredited this much vaunted “European model”. He argued that the image of Europe crumbling under the weight of its debt, with the Eurozone seemingly on the verge of disintegration, was hardly an attractive model for the emerging economies of the South. Nevertheless, it is also true that there are still many countries eagerly waiting in line to join the EU, from the Balkans to the Ukraine. In the latter case, tens of thousands of people are currently risking their lives for the remote chance of one day being able to integrate the “European family”. This seems to show that the “European model” is still attractive for many countries, at least in Europe’s near abroad.
The third speaker, Anne Marie Le Gloannec, examined the question of a “European model” from a different angle by asking why the rest of the world should have to emulate Europe. She argued that it was a sign of arrogance on the part of Europeans to believe that other countries should follow their model. She pointed out that the European model was complex and unique, the result of centuries of turmoil and historical development, and could not simply be copied and pasted in other parts of the world with very different cultures backgrounds. Moreover, she underlined the economic success of the rising BRIC economies, and the shifting of the global balance of power away from the West, indicating that it may perhaps be more relevant to ask whether Europe, stuck in severe recession, should try to emulate the model of these emerging countries. While the lustre of its economic model has undoubtedly been tarnished, Europe remains a political model that countries around the world continue to aspire towards. As the birthplace of democracy and human rights, and with many of its member states consistently ranking amongst the “freest” in the world according to the Freedom House rankings, Europe continues to exert significant soft and normative power as a political model for the rest of the world. Moreover, the recent Arab Spring has discredited the notion of a “clash of civilizations”, demonstrating how European values of democracy and human rights can appeal to people around the world with very different cultural backgrounds.
The fourth speaker, Rudolf Stichweh, picked up on Le Gloannec’s argument about the shift of power away from the West. He underlined how Europe, like the United States, will continue to become a smaller part of the new multipolar world order that has been emerging since the end of the Cold War. As a result, he argued that in order for Europe to ever be able to compete on the world stage with rising powers such as China, India or Brazil, it will have to further enhance integration and cohesion in external affairs. This is supported by widespread predictions by the IMF and World Bank that, if current economic trends persist, not a single European country, not even Germany, will rank amongst the G-8 by 2050. To support his view on the need for further EU integration, Stichweh relied on a quote by Edmund Burke to highlight Europe’s cultural unity and identity: “Wherever you are in Europe, you will never be a total stranger”. Europe’s cultural identity is indeed closely linked to its history. For example, it was Robert Schuman himself, also an eminent professor in medieval history, who declared that his work on starting the process of European integration in the early 1950’s was in fact a continuation of the work begun by the Gregorian Papacy in the 12th century.
In the conclusion to the panel, all speakers concurred on the worrying trends that have arisen with the Eurozone crisis, involving the growth of xenophobia and euroscepticism, as well as a significantly weakened position for Europe on the world stage. Anne Marie Le Gloannec offered a very interesting concluding remark, arguing that Europe was currently “putting its house in order”, resolving internal problems and contradictions, which will then allow it to project its power abroad with much more force and cohesion in the future. It has become clear that the economic crisis is forcing Europe to integrate further along federal lines with plans for fiscal, banking and even political union, which have the potential to significantly enhance Europe’s position in international affairs. Nevertheless, it is equally true that this “integration from above” is increasingly and dangerously disconnected from popular feelings of estrangement towards remote and technocratic European elites. If Europe is ever to play a major role on the world stage again, it will have to associate and connect its people more closely with the European project. Otherwise, Europe will lack legitimacy abroad and its voice in world affairs will be hollow.
A video of the Symposium’s panel on Europe and the World is available here
The dispute between China and the EU over solar panels illustrates the misunderstandings that have plagued EU-China relations
Earlier this year a dispute began between the EU and China after the European Commission temporarily imposed anti-dumping levies on imported Chinese solar panels. Cherry Yu writes on wider EU-China relations and the factors which influenced the dispute. She argues that despite forming a ‘strategic partnership’ in 2003, relations between both sides have been held back by the EU’s value-led […]
The European Union has often been portrayed as a ‘normative power’ on the international stage, in the sense that it exerts influence using ‘softer’ mechanisms such as leading by example. Alexander Ruser writes that this conception of EU power has increasingly come under strain due to deadlock over global climate change negotiations – an issue which has been central to […]