First Report of Session 2013-14 - European Scrutiny Committee Contents


5   Climate and energy policies 2030

(34814)

8096/13

COM(13) 169

Commission Green Paper: A 2030 framework for climate and energy policies

Legal base
Document originated27 March 2013
Deposited in Parliament5 April 2013
DepartmentEnergy and Climate Change
Basis of considerationEM of 16 April 2013
Previous Committee ReportNone, but see footnote
Discussion in CouncilNo date set
Committee's assessmentPolitically important
Committee's decisionNot cleared; Opinion sought from the Energy and Climate Change Committee under Standing Order No. 143 (11)

Background

5.1  The Commission notes that the EU has a clear framework for its energy and climate policies up to 2020, aimed at integrating objectives such as reducing greenhouse gas emissions, securing energy supply and supporting growth, and involving targets for emission reductions, uptake of renewable energy, and energy savings, and supported by a regulatory framework aimed at creating a single market for energy. It says that, whilst good progress is being made, there is a need now to consider a new framework for policies in this area up to 2030, bearing in mind the long investment cycles involved. It has therefore produced this Green Paper, which seeks to explore available options, and poses a number of questions on which responses have been invited by 2 July 2013.

The current document

5.2  The Commission says that the EU's approach must enable it to meet its longer-term climate objectives set out in the Energy Roadmap 2050,[35] whilst taking into account the changes which have taken place since the current framework was agreed in 2008-09, including the on-going economic crisis, budgetary considerations, developments in energy markets, the impact on household budgets and competitiveness, and the international dimension, including the efforts made more widely to reduce greenhouse gas emissions.

5.3  The Green Paper begins by reviewing the current policy framework, and the progress made towards the targets of achieving by 2020 a 20% reduction in emissions of greenhouse gases through the Emissions Trading System and Effort Sharing Decision; a 20% share of consumption for renewable energy following the introduction of indicative targets; and a 20% saving in energy consumption, through such measures as the Energy Efficiency Directive. It also notes the extent to which legislation on the internal energy market, and investment in infrastructure and new technology, has contributed to the security of supply, and affordability, of energy.

5.4  The document then identifies a number of key issues for consideration. These include:

The use of targets

The Commission notes that there are differing views about the usefulness of targets, including the level at which they should be set and whether they should be legally binding. It suggests that, whilst there is a broad consensus on the need for interim greenhouse gas reduction targets if the EU is to achieve its aim of a 80-95% reduction by 2050, further consideration needs to be given to the role of targets for renewable energy and energy efficiency (and the possible interaction between them), how these should be expressed, how far they should be aspirational or binding, and the balance between action at EU and Member State levels.

Coherence of policy instruments

The Commission notes that a combination of measures will be needed, which will interact with each other, and that it is also necessary to take into account the extent to which the approach to the targets for 2020 has led to different approaches by Member States in areas such as support schemes for renewables, energy efficiency, and taxation. It suggest that a balance needs to be struck between concrete measures at EU level and Member States' flexibility to operate in ways most appropriate to their own circumstances: and it also highlights the role which EU financial support, particularly through Cohesion Policy and Research Programmes, plays in relation to climate change and renewable energy, and the role of globally agreed standards and policies in areas such as shipping and aviation.

Impact on competitiveness

The Commission notes that energy policy must contribute to EU competitiveness, but cautions on the danger of rising energy prices, and of international developments (in particular the impact of US shale gas) leading to an increasing divergence between EU prices and those of other major industrial economies. It adds that the various drivers of national energy costs need to be analysed, with the issues to be addressed including greater market integration, exploitation of oil and gas resources, diversified supply routes, international climate negotiations, legislation on aviation and maritime emissions, and the continuing impact of the Emissions Trading System, including the distribution of revenues from it.

Capacity of Member States

Finally, the paper notes that the current policy framework takes into account the differences between Member States in terms of wealth, industrial structure, energy mix, exploitable renewable sources and social structure, and the need to consider how far any future framework should do so, pointing out that, although differentiated targets may promote fairness, they also work against the objectives of the internal energy market and increase costs. It says that decisions in this area must depend on comprehensive information about Member State-specific circumstances.

5.5  The Green Paper concludes by inviting comments on a number of questions (see the Annex to this chapter).

The Government's view

5.6  In his Explanatory Memorandum of 16 April 2013, the Secretary of State for Energy and Climate Change (Edward Davey) says that his Department is currently coordinating the UK's response to the Commission's consultation, but he notes that there is a significant discussion in the EU about the future of its climate and energy policy, with investors having expressed concerns about the uncertainty over the future regime after 2020, bearing in mind their long planning horizons.

5.7  The Minister says that, domestically, the UK already has a clear approach to a long-term climate and energy framework, setting five-yearly carbon budgets to 2027, with a trajectory for emissions reduction in line with the global ambition to keep temperature rises below 2C. In addition, it has supported the Commission's 2050 Roadmap, which identifies that the cost-effective pathway for the EU to achieve the shared objective of cutting 1990 emission levels by 80-95% in 2050 will involve reductions of 25% in 2020, 40% in 2030 and 60% in 2040.

5.8  The Minister also says that the ultimate goal is to secure the EU-wide emissions reduction objective for 2050 cost effectively, and that the Government has not yet formed a position on the 2030 framework. However, it considers that the focus of any potential package for 2030 should be on ensuring that the economically efficient decarbonisation pathway can be taken in a way which promotes EU competitiveness and security of supply. He adds that Member States will benefit from having a clear framework for climate ambition, but that consideration should be given as well to flexibility at the national level on how to achieve the transition to a low carbon economy in a cost effective way, with Member States able to select the most appropriate energy mix to meet their needs. In particular, it will be important for any EU framework to support the UK's own electricity market reform, designed to promote investment in low carbon technologies competing on price over time.

Conclusion

5.9  This document addresses a subject of some topical interest, and highlights a number of policy areas where further action may be needed in the not too distant future, and consequently we think it right to draw it to the attention of the House. As it is essentially a progress report, we think it unlikely that it raises issues which require further consideration at this stage, but, before taking a definitive view on this, we would welcome the formal Opinion of the Energy and Climate Change Committee on the significance of the Report, in accordance with Standing Order No. 143 (11). In the meantime, the document remains under scrutiny.


35   (33563) 18597/11: see HC 428-xlix (2010-12), chapter 14 (1 February 2012). Back


 
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