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Dedicated to tackling climate change

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					Dedicated to tackling climate change?

By Reinhilde Veugelers

Published in European Voice, 29 Oct 2009



Our response to climate change – probably the most pressing policy challenge we face – needs
to be speedy and global in scale. The EU needs to take an approach that is more concerted and
broader than at present and, to achieve that, it needs a commissioner dedicated to the task.

That approach should be pro-innovation. To keep the costs of adaptation and mitigation
‘manageable', we will need a portfolio of technologies. That will require us, firstly, to increase
use of technologies that are already commercially viable; secondly, to scale up technologies
that are near commercial viability; and, thirdly, to dedicate resources for fundamental and
applied research in order to develop breakthrough, green technologies.

To switch on the private-sector innovation machine, government intervention is needed. A
policy framework is required that can harness the power of markets, through the provision of
incentives for the investment in new technologies.

Markets and entrepreneurs need governments to provide a policy framework that is strong,
credible and predictable. Governments can use three sets of instruments. Carbon pricing is one.
Support for research and development – including support for the early deployment of clean
technologies and neutralisation of the installed base advantage of older, dirtier technologies –
is a second instrument. And, thirdly, governments can eliminate non-market barriers for green
technologies and use regulatory tools to ease the substitution of dirty technologies. The more-
developed countries should provide less-developed countries with subsidised access to new
clean technologies.

These principles appear in the EU's current climate-change action plans, but they are too poorly
developed for them to switch on the innovation machine. Public commitments for supporting
green research and development are too low, vary too much over time and are not co-
ordinated internationally. As for carbon pricing, current carbon taxes and the cap-and-trade
system have failed to produce a carbon price high enough and predictable enough to give
investors a sufficiently strong incentive to invest in green technologies.

A pro-innovation approach to climate change requires a change in current EU policymaking. A
commissioner dedicated to climate change could not alone set this new direction, but creating
the post would help. Why?

Firstly, the new European Commission would give a clear and strong political signal to
governments and the private sector that work on limiting climate change is a priority.
Secondly, much of the climate change-related work to be done at the EU level cannot easily be
combined with other responsibilities. That is particularly so since a pro-innovation approach
requires more than implementing the EU's existing 20/20/20 plan to reduce emissions by 20%
by 2020 and increase the contribution by renewable energy to 20%.

A 20/20/20 Mark II is in order. It should improve the cap-and-trade system to ensure a high and
predictable carbon price emerges. It should stimulate new technologies by providing funds, co-
ordinating international co-operation, and providing an integrated EU market with clear
regulations and standards. And the EU should lead international negotiations on an
internationally linked cap-and-trade system and an efficient and equitable transfer of know-
how and funds to developing countries.

The third reason to have a dedicated climate-change post is that a pro-innovation approach
requires intense co-ordination across policy areas such as energy, competition policy, the
internal market, research and trade. A mandate is needed to cut across the work of so many
departments. A commissioner for climate change would have such a mandate.

				
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