The “Bruges Action Plan”: A simulated G20 Meeting

The Setting
The science of climate change emphasizes the need for immediate action to stem the growth of heat trapping greenhouse gases in the atmosphere. Emissions need to drop by 80% in developed countries and 50% in developing countries within 50 years. Other analysis suggest that the world as a whole needs to reduce emissions by 80% by 2050. The peak emissions must occur before 2020/25 to have any chance of achieving these goals.
The all-encompassing UN process to create a sequel to the Kyoto Protocol was able to achieve only some “political commitment” agreements at previous COPs, and some steps forward to formulate a successor soon. Given the lack of progress and ongoing economic concerns the prospects for any meaningful agreement in 2013/14 seems remote.
Recent analysis of eco-innovation prospects and the relatively lower costs of introducing them has raised hopes that appropriate polices might be agreed to that would address the needs of both developed and developing countries. However, strategic interests will probably shape discussions and any agreement, and the financial crisis over-shadows some of the proposals.
In September 2013, the G20 Heads of States and Governments shall convene in Bruges, Belgium, to discuss and decide on a long-term action plan. Observers believe that recent natural disasters such as the tsunami in Japan and some heavy flooding have helped to vanish most blocking positions of previous Conferences of the Parties to the Kyoto Protocol. Their sherpas meet now to prepare an action plan.
This G20 meeting is seen as an opportunity to develop a revised strategy for creating an effective international climate agreement. The agenda of this meeting has not been fixed to allow for open exchange and new ideas to flourish. Representatives from other DCs, business and NGO’s have also been invited to deliver proposals.

The six actor groups have been as follows:

a) Green pioneers from Annex I countries, the EU and those industrialized countries with expressed willingness to lead in regards to GHG reduction and support for international action.
b) Major countries with long-standing resistance against reduction but recent trends to unleash eco-innovation and address the issue.
c) Emerging green market economies, countries such as China, Brazil, India, South Korea, Indonesia, etc. with pressing environmental problems and capabilities to act.
d) Green private sector: Green alliances incl. industries, i.e. some SME’s and some large companies in sectors such as renewable energies, energy efficiency, recycling, resource efficiency, clean vehicle producers, organic farming.
e) A representative from DCs, e.g. NGOs who see much window dressing around the globe and push for real long-term action, most notably support for adaptation in de-veloping countries and for vulnerable group
f) Incumbent ‘brown’ industries, including major utilities, coal, oil, gas, heavy metal industry, cement, etc. Likely with new ideas at the horizon but uncertain whether this may hamper profitability.

The Outcome
• Aim: 75% GHG emission reduction on average at global level by 2050. Global GHG emissions should peak around 2025, initiated by immediate reductions by industrial-ized countries and followed by reductions of emerging economies
• Global Environmental Financial Mechanism establishment (GEFM)
o Funding: ETS (Emissions Trading System) + extraction tax revenue based;
o Up to one trillion €, to start in 2020 latest
o Allocation: subject to projects’ sustainability impact assessment, two-layered, based on (i) cost/ benefit analysis regarding GHG reduction and abatement costs and (i) indirect and long term effects;
o Eligibility: priority given to developing countries.
• A global Emissions Trading Scheme
o To build upon experience e.g. from the EU and to align existing schemes towards an international ETS;
o Amount of allowances should be related to GDP per capita, by country, converted into PPP;
o Methodology: Auctioning to raise money for the GEFM; grouping of countries of similar purchasing power in order to decrease administrative costs of auctioning platforms establishment as well as monitoring costs;
o Task force creation is needed in order to harmonize data on socio-economic indicators, including HDI and carbon footprint.
• 1% tax on the extraction of oil, gas and coal to co-finance the GEFM, with the scope of reinvesting in system eco-innovations in these industries and their downstream applications. Countries may decide to join the ETS or to introduce such tax.
• Note: VAT funding versus ETS funding yet to be analysed.

Participants: Facundo Sabino HERRERA; Florian Klaus FLACHENECKER; Alena YATCHENIA; Pierre SERKINE; Ambre MAUCORPS; Nuray NALLI; Roxana SANDU (Assistant); Raimund BLEISCHWITZ (Professor). Done at the College of Europe, Course on the Economics of the EU climate change strategy, April 19, 2013.

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