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Stavros DIMAS

Member of the European Commission, responsible for environment

Climate action
Energy for a changing world

Press conference European Commission, Brussels
Wednesday, 23 January 2008

Ladies and gentlemen,

On current trends, climate change will almost certainly be endangering the lives of millions of people and causing serious disruption to our economies within the lifetimes of many in this room today.

Europe and the rest of the world have to act fast, and act boldly, if we are to prevent this catastrophe.

Last month's Bali conference recognised the urgency and gave the green light for drawing up a new global climate agreement by the end of next year. Today's package underlines the European Union's determination to continue leading global action by example.

It shows our partners around the world that making the deep reductions in greenhouse gas emissions that are necessary is fully compatible with continued economic growth and prosperity. It will give our industry a first mover advantage in developing clean technologies. The Emissions Trading System, which we are proposing to strengthen and expand, is essential to achieving these cuts cost-effectively

EU heads of state and government commited to deep emission reductions and a major increase in renewable energy last March. Today we are proposing a fair distribution of the effort that is needed to put these targets into practice.

Our approach also reflects the differences in wealth between older and newer members. We have applied the principle that the European Union has always promoted in climate change negotiations at global level - namely that richer countries must take the lead. To live up to EU leaders’ commitments, every member state needs to do its fair share.

Today’s package puts in place the mechanisms to deliver on Europe’s pledge to reduce emissions by at least 20% of 1990 levels by 2020 regardless of what other countries do. But we also provide for scaling up the level of ambition, in line with EU leaders’ commitment to a reduction of as much as 30% in the framework of a satisfactory global climate agreement.

This is crucial because it is a 30% cut by developed countries that is needed to get global emissions onto a downward track - and it is a 30% cut that we will continue to press for in the international negotiations launched at Bali.

It is true that our proposals have a cost. But it is also true that the benefits far outweigh these costs In fact, the Commission is presenting a package that minimises the overall cost to the EU economy.

In terms of annual effects on GDP – which is in any case a less than perfect measure of progress – the impact of cutting emissions by 20% will be as low as 0.04 to 0.06% per year.

As for the benefits, the package is expected to deliver the kind of structural changes that Europe needs to remain competitive. By taking the lead, Europe will be kick-starting the development of the low-carbon global economy that is vital to prevent climate change from reaching dangerous levels. We are giving ourselves a first mover advantage in a new industrial revolution that will unleash a wave of innovation and job creation in clean energy and high-efficiency technologies.

The package will also cut the European Union’s oil and gas imports, increasing our energy independence and saving billions of euros each year. And it will further reduce air pollution and the high costs it causes. In 2020 we will be saving 11 billion euros a year through the reduced need for air pollution control equipment like filters in smokestacks.

To underpin the shift to a low-carbon economy, we believe it is essential to phase out the free allocation of emission allowances and move to 100% auctioning under the EU ETS. But we are fully aware that the competitiveness of specific energy-intensive industries in Europe could be at risk if their competitors around the world do not have similar emission constraints.

Ladies and gentlemen, the chances of a new global climate deal are slim without leadership from the industrialised world. This package enables Europe to provide that leadership and generate strong momentum towards an ambitious global agreement. It is based on a fair share-out of the effort between member states and it will strengthen Europe’s economy. I hope the Council and Parliament will move swiftly to implement it.

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