Sectoral approaches can be considered part of a transition towards a global carbon market. Providing the potentially strongest link between the EU emissions trading scheme (EU ETS) and sectoral approaches, sectoral benchmarks can be used for setting caps, free allocation, or can become a catalyst for linking carbon markets. There would be at least three ways to strengthen the effectiveness of sectoral approaches through the choice of performance, metrics, reporting and compliance.

Sectoral approaches to mitigating climate change depend on setting goals that incorporate performance indicators – such as benchmarks and the effective application of measurement, reporting and verification requirements – supported by well-developed data systems. At the same time, each host country deciding to adopt these approaches needs to develop and demonstrate the ability to implement the scheme. This report briefly introduces the basic requirements for sectoral approaches while drawing lessons from current efforts.

This Working Document complements the CEPS Policy Brief, Understanding India’s climate agenda, and elaborates on three key issues related to the country’s energy challenges: access to energy, the future emissions trajectory and energy subsidies. This study looks into the making and framing of the country’s domestic climate agenda from a political economy perspective.

Noriko Fujiwara performs a quick post-mortem on the outcome and performance of the EU at Copenhagen in this new CEPS Commentary and then swiftly moves on to draw lessons for how the EU can effectively and forcefully project itself into the forthcoming series of meetings leading to the next annual conference (COP16) in Mexico City before the end of the year.

Days after the meeting ended, people are still asking themselves whether the outcome of the Copenhagen summit was positive or not. What is striking is that the outcome is generally seen in a more favourable light in the US than in Europe. The difference can probably be explained by different expectations and perspectives. In this new CEPS commentary, CEPS Fellows Christian Egenhofer and Anton Georgiev make a first attempt at deciphering the implications of the accord for the EU.

The purpose of a cap-and-trade system is to help in the fight against global climate change. This paper warns that a unilateral approach could increase global emissions by shifting production to more carbon-intensive methods abroad. Acting alone, the EU’s Emission Trading Scheme may be doing more harm than good.

This report is based on discussions in the CEPS Task Force on the Clean Development Mechanism and Future Flexible Mechanisms post-2012, chaired by Ulrika Raab, Senior Advisor at the Swedish Energy Agency. It was assumed that flexible mechanisms will play a crucial role in facilitating a positive outcome in the UN climate change negotiations in Copenhagen in December 2009, and that they will inspire a wide range of actions by participating countries on their own and directing attention to business investment opportunities.

In light of the immature state of preparations for the international climate change negotiations in Copenhagen in December, CEPS Senior Research Fellow Christian Egenhofer predicts that the best outcome to be hoped for at this point is an agreement to continue negotiations in earnest. He warns the developed countries, led by the EU, not to accede too easily to the less-founded demands of developing countries, just to be able to declare a political victory.

In an effort to address the financing gap for clean energy projects in developing countries, the Global Energy Efficiency and Renewable Energy Fund (GEEREF) was set up in late 2008 as an innovative financing instrument aimed at leveraging private investments with public funds. The purpose of this CEPS Policy Brief is to give an update on GEEREF with a special focus on its financing and possible impacts of the financial crisis. The paper concludes that the strength of GEEREF is not its current financial volume but the innovative nature of the instrument.

The annual climate change conference (COP14/CMP4) will take place in Poznań, 1–12 December 2008. This Policy Brief aims at providing a brief assessment of where we are on the road from Bali to Copenhagen, thinking ahead of Poznań in relation to the current negotiating environment and exploring the possible nature of an agreed outcome to be reached in Copenhagen at the end of 2009.

This paper summarises various estimates of the financial impacts of climate change. It differentiates between studies referring to incremental costs (UNFCCC, World Bank, Oxfam, UNDP, OIES) and those referring to costs expressed as a percentage of global economic output (Stern Review, UNDP, Vattenfall, European Commission, OECD, IPCC). Based on these studies, the paper presents the potential order of magnitude of costs to the EU27, as well as estimations of the role of the public sector in contributing to these costs.

The past decade has seen a surge in research and policy analysis on ways in which technology and finance can support mitigation. Similar studies for adaptation are much more recent, and their results therefore less mature. This is a potential bottleneck in the negotiations towards an agreement in Copenhagen. This paper aims to facilitate discussions on adaptation finance by presenting a summary overview of the current state of knowledge and policy initiatives, and by outlining a number of issues that would need to be considered in the negotiation process.

Carbon capture and storage (CCS) technology is seen as key to the achievement of EU and global climate change targets, yet there appears to be no obvious budget for its demonstration phase. In this new Policy Brief, CEPS Senior Researcher Christian Egenhofer makes the case for public support...

EU climate policy is based on GHG emissions reduction (mitigation) coupled with measures aimed at responding efficiently to the unavoidable consequences of climate change (adaptation). However, as the European Commission recently stated in its Green Paper on adaptation in Europe, there is still a need to develop an overall EU adaptation strategy. Moreover, such a strategy should take into consideration both efficiency and equity concerns. In this article we propose a framework for EU adaptation policy that addresses both concerns and which enables a transparent decision-making process.