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Focus 29.12.2009  
E-news 29 December 08

CLIMATE

1.1. Tough climate goals easier than feared
1.2. Commodity costs expected to soar from climate change

ENERGY

2.1. Commission clears proposed acquisition of British Energy by EdF, subject to conditions

POLICY

3.1. Parliament adoption of climate deal forfeits EU role as climate leader

PUBLICATIONS

4.1. Climate Change Country Reports

JOBS

5.1. VACANCY FOR A SENIOR POLICY OFFICER AT CAN-EUROPE
5.2. Vacancy for a Communications Manager

CLIMATE

1.1. Tough climate goals easier than feared
29 December 2008, Daily Times
Tough targets for avoiding dangerous global warming may be easier to achieve than widely believed, according to a study that could ease fears of a prohibitive long-term surge in costs.
The report, by scientists in the Netherlands and Germany, indicated that initial investments needed to be high to have any impact in slowing temperature rises. Beyond a certain threshold, however, extra spending would have clear returns on warming.
Until now, most governments have worried that costs may start low and then soar — suggesting that ambitious targets will become too expensive for tackling threats such as extinctions, droughts, floods and rising seas. “It gets easier once the world gets going ... ,” said Michiel Schaeffer of Wageningen University in the Netherlands and lead author of the study in Tuesday’s edition of the journal Proceedings of the National Academy of Science.
“In a sense ... our paper is bad news: doing a bit is hardly effective,” he said. “On the other hand it’s good news, because the return on the really ‘painful’ investments later on, of which the world is so afraid, gives you much better returns.”
More than 190 governments have agreed to work out a new UN climate treaty by the end of 2009. Global economic slowdown is making many wary of setting too strict goals. The article suggested there was a 90 percent chance of limiting global warming to 2 Celsius (3.6 Fahrenheit) above 19th century levels with average annual global investments of 2 percent of gross domestic product (GDP) from 2005-2100.
Spending more: That is roughly comparable to the percentage of GDP the European Union spends on environmental policies, Schaeffer said.
But early investments would have little impact. Spending 0.5 percent of world GDP would give a 10 percent chance of achieving the 2 Celsius goal while an investment of one percent of GDP would give a 40 percent chance.
Two Celsius is a goal adopted by the EU, some other nations and many environmental groups as a threshold for “dangerous” climate change. The study focused on setting a ceiling for temperature rises, rather than on more normal goals of stabilising concentrations of greenhouse gases in the atmosphere, mainly from burning fossil fuels in cars, factories and power plants.
The scientists said that shift gave a better perspective and toned down worries about exponential rises in costs. “This viewpoint is more relevant for real-life climate impacts,” Schaeffer said. “Concentrations don’t tell you that much about what happens in terms of rainfall ... or to society.”
Link: http://www.dailytimes.com.pk/default.asp?page=20081229story_29-12-2008_pg14_4

1.2. Commodity costs expected to soar from climate change
28 December 2008, Business Mirror
After the global economic meltdown, extreme weather events rooted on climate change will drive up costs of certain commodities including oil and rice, endangering the bottom lines of companies and the pockets of millions of consumers by 2018, according to a publication recently released by international think tank A.T. Kearney Inc.
According to the study, titled “Rattling Supply Chains: The Effect of Environmental Trends on the Fast Moving Consumer Goods Industry,” which assessed certain commodities, prices can increase up to 45 percent and cut earnings before interest and taxes by as much as 47 percent by 2018.
The study said businesses in the fast-moving consumer goods industry could see earnings fall by 13 percent to 31 percent by 2013, and 19 percent to 47 percent in earnings in 2018 if they do not implement sustainable strategies throughout their supply chains.
“Winners will generally be those companies that anticipate the implications of a changing landscape, collaborate with suppliers and other stakeholders and make environmental sustainability one of their business principles. Hedging strategies or shifting suppliers will not be enough,” the study stated.
“We believe that in order to adapt to these challenges, companies will need to implement real structural changes, such as product innovation and restructured value chains, which will affect both the companies and millions of existing and new consumers,” it added.
The study said that extreme weather events, such as those seen this year, are likely to occur more frequently by 2018. The study said that already, rising temperatures have increased the atmosphere’s water-holding capacity, which created the severe drought that has affected the United States, Southwest, China and India.
These climate events do not usually occur in isolation and that recent drought conditions have coincided with a massive flood in the US Midwest, as well as typhoons in Brazil, Indonesia, Malaysia and the Philippines.
“While we do not claim to be able to predict the future, and indeed our methodology has inherent limitations, our scenario is based on scientific knowledge and a sound understanding of policymaking. We believe that the magnitude of our estimated impact on earnings is not unrealistic for companies that do not act,” AT Kearney said.
The commodities assessed by the study include energy such as oil, natural gas and electricity; cereal, grains and soy; sugar; palm oil; and timber. The study examined these commodities under a scenario called Ecoflation, which showed a future where policies and constraints on natural resources force firms to add to the cost of doing business the environmental costs previously borne by society.
In terms of energy prices, the study found that Ecoflation can increase energy costs significantly by 2018. The study said that oil prices can increase by 22 percent; natural gas, 40 percent; and electricity, 45 percent.
At Kearney said that climate change will cause increasing short-term disruptions and price spikes. Water scarcity, for its part, will also affect existing hydroelectric power plants.
As for cereals, grains and soy, the study estimated that Ecoflation can increase prices of grains and cereals by 13 percent and soy, by 3 percent by 2018. These projections, AT Kearney said, are higher than existing commodity projections for 2018.
The study explained that rising oil prices increase transport costs and drive demand for biofuels. This can result in higher crop prices for commodities that are used for biofuel production such as corn or maize.
“At the same time, a discontinuation of existing biofuel policies would lower demand and prices. Climate change and water scarcity could have an impact on production of crops, although soy, wheat and corn are not heavily irrigated and need less water than other crops. Soybean fields have proliferated in Brazil, and a strengthening of deforestation policies there would raise prices for soy,” the study stated.
Link: http://businessmirror.com.ph/index.php?option=com_content&view=article&id=3888:commodity-costs-expected-to-soar-from-climate-change&catid=23:topnews&Itemid=58

ENERGY

2.1. Commission clears proposed acquisition of British Energy by EdF, subject to conditions
22 December 2008, Europa RAPID
The European Commission has approved under the EU Merger Regulation the proposed acquisition of British Energy (BE) by Electricité de France (EdF). The Commission's decision is conditional upon EdF´s commitment to divest the power generation plant at Sutton Bridge in the UK (owned by EdF) and at Eggborough (owned by BE), to sell certain minimum volumes of electricity in the British wholesale market, to unconditionally divest a site potentially suitable for building a new nuclear power station located at either Dungeness or Heysham in the UK at the purchaser's choice and to end one of the merged entity's three grid connection agreements with the National Grid at Hinkley Point in the UK. The Commission concluded that the transaction, as modified by these commitments, would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Electricité de France S.A. (EdF) is a company incorporated under the laws of France active in the generation and wholesale trading of electricity and in the transmission, distribution and retail supply of electricity to all groups of customers. In the UK, it is active mainly in coal and gas power generation, wholesale, supply and distribution of electricity.
British Energy (BE) is a UK-based company active in the markets for the generation and wholesale of electricity and supply to industrial and commercial customers. BE has a predominantly nuclear power generation portfolio.
The activities of EdF and BE overlap at the levels of generation and wholesale as well as the supply of electricity to industrial and commercial customers.
Although the combined entity would not have extremely high market shares, the Commission found during its investigation that the transaction, as initially notified, would have been likely to raise serious competition concerns in four main areas.
Firstly, due to the combination of the flexible generation portfolio of EdF and the base-load generation portfolio of BE's nuclear power plants, the Commission was concerned that the proposed transaction could have made it easier for the merged entity to withdraw electricity supplies from the market in order to increase price.
Secondly, the Commission was concerned that the combination of the short generation position of EdF and the long generation position of BE was likely to lead to an increased internal use of electricity that would otherwise have been sold to the market. This would have led to a reduction of liquidity which could have had negative effects in both the wholesale and the retail supply markets.
Thirdly, the Commission was concerned that there are a limited number of sites likely to be suitable for the construction of a first wave of new nuclear reactors in the framework of the UK policy on building new nuclear power stations. BE owns many of the sites most likely to be suitable for new nuclear build, while EdF owns key land at two such locations. The transaction, as originally notified would therefore lead to a high concentration in the ownership of sites most likely to be suitable for new nuclear build.
Finally, the combination of EdF and BE's current rights to connections to the electricity transport network would have enabled the merged entity to hold connection rights beyond its combined capacity expansion plans, with the risk of unduly delaying power generation projects of its competitors.
To address the above concerns, the parties submitted remedies. Further to the results of the market test of these remedies and in its own assessment, the Commission found that the remedies proposed were not sufficient to remove the competition concerns with respect to the two first areas of concern. However, subsequently, the parties submitted an improved remedy package comprising the commitments to divest EdF's power generation plant at Sutton Bridge and BE's generation plant at Eggborough, to sell certain minimum volumes of electricity in the wholesale market for a certain period of time when the combined entity would have had the ability to internalise the use of electricity that it produces, to divest a site potentially suitable for building a new nuclear power station located at either Dungeness or Heysham and to end one grid connection agreement with National Grid at Hinkley Point.
The Commission concluded that the revised remedy package was sufficient to remove all identified competition concerns.
Further information on the case will be available at:
http://ec.europa.eu/competition/mergers/cases/index/m104.html#m_5224

Link: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/2048

POLICY

3.1. Parliament adoption of climate deal forfeits EU role as climate leader
17 December 2008, Greenpeace
Members of the European Parliament (MEPs) voting this morning in Strasbourg have supported proposals that fall short of what is needed to avoid the worst effects of climate change and reduce our dependence on expensive fossil fuels.
"The Parliament has marginalised itself by lacking the courage to make even small changes to the compromises negotiated by the EU summit last Friday. Europe promised leadership on climate, but so far it has led us up the garden path. The climate package doesn´t even take us half way to where we should be in the fight against climate change," said Joris den Blanken, Greenpeace EU climate & energy policy director.
Greenpeace believes EU leaders meeting in Brussels last week weakened the ambition of the original Commission proposals by giving in to pressure from industry lobbies and to accommodate the short-sighted interests of several member states. The climate parts of the agreed text are filled with exemptions which threaten the EU´s ability to even reach its inadequate 20% target.1 The legislation also ignores the polluter pays principle by handing out many free credits to high emitting industry. The most positive element of the package was the law to boost the share of renewable energy to 20% by 2020.
"The EU´s much-trumpeted 20% carbon reduction target just doesn´t go far enough. Science tells us we need at least 30%, and we need it here, in Europe. We cannot afford to continue with business as usual," said den Blanken.
According to Greenpeace, as the EU begins to develop its negotiating mandate going into the global climate conference in Copenhagen at the end of 2009, this climate package cannot serve as a basis for the EU´s position on the international stage. The EU position needs to be urgently improved.
MEPs have also adopted feeble legislation aimed at reducing carbon emissions from cars. After aggressive lobbying from car manufacturers, the original reduction targets and fines for non-compliance were significantly watered down. The legislation will also not come into effect until 2015, three years later than in the original plan.
You can find the latest Greenpeace briefing on the EU climate package on: www.greenpeace.org/euunit/press-centre/reports/MEPs-must-exercise-democratic-power
1 EU leaders significantly weakened the effort sharing part of the climate package by caving in to demands from member states to offset most of their reduction efforts by supporting questionable projects outside of the EU. Between 65% and 75% of these efforts would now take place in the developing world. Effort sharing covers about 55% of all EU greenhouse gas emissions and includes sectors not covered by the EU emissions trading scheme (such as the transport sector, agriculture, households, etc).
Link: http://www.greenpeace.org/eu-unit/press-centre/press-releases2/Parliament-adoption-of-climate-deal

PUBLICATIONS

4.1. Climate Change Country Reports
is the first INFORSE-Europe publication that deals with the climate-change issues in new EU member states (post-communist countries only). These countries all face more or less similar obstacles with respect to their economical and social development. The present report makes available hard-to-find information that mainstream media consistently fail to report about the attitudes of ordinary citizens and of governments towards climate change problems. The primary media’s silence does not mean that climate change is not an issue in these countries; the truth is just the opposite. According to the latest EU-wide survey on attitudes of EU citizens towards climate change (Eurobarometer 69.2 N°300, 2008) there is a vast majority (between 63% and 89% of inhabitants) in each of these countries who consider climate change as a "very serious problem". Over 50% of citizens polled consider it to be the most serious problem currently facing the world as a whole. This publication is aimed at presenting, especially for the use of non-governmental organizations, the situation in new EU member states from the perspective of people living and working there.
Link: http://www.inforse.org/europe/fae/CC/Cover.html

JOBS

5.1. VACANCY FOR A SENIOR POLICY OFFICER AT CAN-EUROPE
Based in Brussels and available to start at the earliest possibility
Deadline for applications: 19th January 2009
For more information on Climate Action Network Europe please consult our web site at http://www.climnet.org

5.2. Vacancy for a Communications Manager
Based in Brussels and available to start at the earliest possibility
Deadline for applications: 22nd January 2009
Closing date for applications is Wednesday 21st January 2009. Interviews will be held in the
second week of February. For more information on Climate Action Network Europe please consult our web site at http://www.climnet.org

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