H3 Efforts and Costs of the EU Vs Other World Regions

1Supplementary Information: The impact of surplus units from the first 2Kyoto period on achieving the reduction pledges of the Cancún Agreements

4SI.1 Methodology for the calculation of surplus emission units

5To assess the impacts of the options on the actual reduction levels of the second 6commitment period, we used i) the spreadsheet ‘Surplus AAU Check Tool’, initially 7developed by the Potsdam Institute for Climate Impact Research (PIK) , together with 8ii) data on CERs and ERUs from the UNEP Risoe CDM/JI Pipeline Analysis and 9Database, 1 February 2012 (http://uneprisoe.org/) (see Table SI.1), and data of 10LULUCF credits for the CP1 period from European Commission, Joint Research 11Centre (JRC), JRC LULUCF tool1. The calculations performed with this tool and data 12were based on the following main assumptions:

13. A second commitment period of eight years is assumed (2013–2020), in which all 14 countries with Kyoto surplus units join;

15. The contribution of land-use credits for the second commitment period for 16 achieving the reduction pledges by 2020 were not taken into account when 17 calculating the level of surplus assigned amounts;

18. Since the EU Member States are treated as individual parties also in 2020 in the 19 calculations, the implications of the EU Emissions Trading Scheme and Effort 20 Sharing decisions have not been considered;

21. The use of surplus units was assumed not to be spread out evenly over the 2013– 22 2020 period. Instead, more surplus units were believed to be used later on in the 23 period. This would imply that, in 2020, twice as many of the surplus units would 24 be used, compared to a situation of even distribution over the 2013–2020 period 25 (see also the sensitivity analysis in Section SI.2).

26. CERs and ERUs were allocated to countries based on the first credit buyer listed 27 in the CDM/JI pipeline database. We excluded projects for which the credit buyer

28 was not available (this was the case for a total amount of 8 MtCO2eq of CERs and

29 17 MtCO2eq for ERUs). We have not taken into account trading of offsets once 30 they have been purchased.

11 Version 6 December, http://afoludata.jrc.ec.europa.eu/index.php/models/JRC_LULUCF_TOOL. 2 1 3 MtCO2 eq for the CP1 Assigned Emission CP1 CP1 CP1 CP1 CP1 CP1 Total Total CP1 period Amount projections surplus expected maximum expected maximum LULUCF expected max 2008–2012 Units 2008–2012 AAUs CERs estimate ERUs estimate credits CP1 surplus estimate CERs ERUs units CP1 surplus unit EU-27, gross 26,562 23,078 3,827 994 1,706 119 371 242 5,182 6,147 EU-27, net 26,562 23,078 3,484 994 1,706 119 371 242 4,839 5,804 Australia 2,958 2,733 224 0 4 0 0 –133 91 95 Belarus 586 455 131 0 0 0 0 7 137 137 Canada 2,792 3,482 –690 105 122 0 0 223 –362 –344 Iceland 19 23 –5 0 0 0 0 0 –5 –5 Japan 5,928 6,107 –179 221 344 14 38 226 281 428 New Zealand 310 354 –45 0 0 0 0 84 39 39 Norway 251 253 –2 14 18 0 1 5 18 23 Liechtenstein 1 1 0 0 1 0 0 0 0 1 Russia 16,617 10,852 5,765 0 0 0 0 605 6,370 6,370 Switzerland 243 256 –13 45 146 70 73 2 104 208 Ukraine 4,604 1,961 2,644 0 0 0 0 20 2,664 2,664 Annex I (excl. 60,870 49,555 12,591 1,379 2,341 203 483 1,281 15,454 16,731 USA) Total gross Annex I (excl. 60,870 49,555 11,315 1,379 2,341 203 483 1,281 14,178 15,454 USA) Total net CP2 countries, 35,532 29,115 6,826 1,054 1,875 189 446 227 8,296 9,374 Total gross CP2 countries, 35,532 29,115 6,418 1,054 1,875 189 446 227 7,888 8,966 Total net

EU-15 19,621 18,638 1,320 994 1,706 119 351 166 2,598 3,542

1 2 2 Austria 344 395 –51 20 33 5 26 12 –15 20 Belgium 674 612 62 1 3 1 2 0 64 67 Denmark 277 301 –24 4 20 12 30 6 –3 31 Finland 355 325 30 0 6 0 5 3 33 44 France 2,820 2,605 214 85 86 12 15 16 327 332 Germany 4,868 4,603 265 85 131 2 10 23 375 428 Greece 669 599 70 0 0 0 0 2 71 71 Ireland 314 309 5 0 2 0 3 16 21 26 Italy 2,416 2,476 –60 98 134 0 0 51 89 125 Luxembourg 47 57 –10 0 1 5 10 0 –4 2 Netherlands 1,001 967 34 140 256 60 152 –5 229 437 Portugal 382 366 16 0 5 0 0 14 30 35 Spain 1,666 1,859 –192 30 67 0 1 12 –150 –112 Sweden 375 294 81 48 89 7 23 –1 134 192 UK 3,412 2,870 542 484 872 13 75 18 1,058 1,507

EU-12 6,942 4,440 2,508 0 0 1 20 76 2,584 2,604 Bulgaria 610 304 306 0 0 0 0 1 306 306 Czech Republic 894 670 224 0 0 0 0 6 230 230 Estonia 196 85 111 0 0 1 1 2 113 114 Hungary 542 339 204 0 0 0 0 5 209 209 Lithuania 227 110 118 0 0 0 0 5 123 123 Latvia 119 54 65 0 0 0 12 6 71 84 Poland 2,648 1,894 754 0 0 0 6 15 769 776 Romania 1,280 662 618 0 0 0 0 20 638 638 Slovakia 331 223 109 0 0 0 0 9 118 118 Slovenia 94 100 –6 0 0 0 0 7 0 0 1

1 3 2 1Table SI.1 Assigned amount units (AAUs), expected emissions and expected surplus units (surplus AAUs, CERs and ERUS) in the 2first commitment period of the Kyoto Protocol.

3Sources: Greenhouse gas emission projections for the CP1 period (2008–2012) from PRIMAP4 (expected emissions from 2010 onwards); 4expected and maximum CERs and ERUs for the CP1 period calculated from the UNEP Risoe CDM/JI Pipeline Analysis and Database. Expected 5CERs and ERUs for the CP1 period are based on CERs/ERUs issued so far divided by CERs/ERUs expected from the same time period 6according to the project design document, times expected CERs/ERUs. Maximum estimates for the CP1 period are the expected CERs/ERUs 7according to project design documents. LULUCF credits for the CP1 period from European Commission, Joint Research Centre (JRC), JRC 8LULUCF tool. The total CP1 surplus units includes the surplus AAUs, total CERs and ERUs, based on an expected and a maximum estimate.

1 4 2 1SI.2 Sensitivity analysis

3Table SI.2. Impacts of CP1 surplus units under different options for dealing with these units 4 on reduction efforts by 2020, as % of 1990 levels.

Default Option 1 Option 2 Option 3 Option 4 calculations: 1 2 5% 10 low pledge High

wedge assumption % % % pledge EU27* (net)** 19 0 1 4 9 3 i – 0 ii 5 i –10 ii 0 Australia 5 2 4 5 5 5 5 0 Belarus 25 1 2 5 11 0 0 0 Japan 4 1 2 6 6 4 4 0 New Zealand 17 1 3 7 13 17 17 0 Russia 48 1 2 6 12 0 0 0 Ukraine 71 1 2 6 12 0 0 0 CP2 countriesa (net)** 25 1 2 5 10 3 – 1 5 – 8 0 Annex I countries excl. USAb (net)** 27 0 1 4 8 2 – 1 3 – 5 0 Impact of average Option 1 Option 2 Option 3 Option 4 use of surplus 1 2 5% 10 low pledge High

instead of wedge % % % pledge assumption EU27* (net)** 9 0 1 2 4 2 i – 0 ii 2 i –9 ii 0 Australia 3 1 2 3 3 3 3 0 Belarus 12 1 1 3 5 0 0 0 Japan 2 1 1 3 3 2 2 0 New Zealand 8 1 1 3 7 8 8 0 Russia 24 1 1 3 6 0 0 0 Ukraine 36 1 1 3 6 0 0 0 CP2 countriesa (net)** 13 1 1 3 5 2 – 0 3 – 7 0 Annex I countries excl. USAb (net)** 13 0 1 2 4 1 – 0 2 – 5 0 5* The numbers for the EU27 only applies for the pledge of 30%, as for the 20% reduction pledge, the EU has 6decided not to use surplus units to reach their pledge. 7** The gross calculations would be about 1% higher for option 1 and 2. 8a All Annex I countries excluding the USA, Japan, Russia, Canada and Croatia 9b Annex I countries excluding USA, Turkey and Croatia 10i treating EU as individual countries; ii treating EU as a bubble. 11Source: Calculated from Surplus AAU Check Tool of PIK and UNEP Risoe CDM/JI Pipeline Analysis and 12 Database, 1 February 2012 (SI)

1 5 2 1Table SI.3. Impacts of CP1 surplus units under different options for dealing with these 2on reduction efforts in 2020, as % of the emission reduction level relative to BAU for the 3high, conditional reduction pledges (only those countries with pledges that lead to reductions 4relative to BAU are shown).

Default calculations: BAU Option 1 Option 2 Option 3 Option 4 levels based on PRIMAP 1% 2% 5% 10% IV scenario & wedge assumption EU27* (net) 180% 3% 14% 43% 84% 51%i 0% Australia 3% 0% 0% 3% 3% 3% 0% Japan 24% 7% 14% 33% 33% 24% 0% New Zealand 40% 0% 0% 20% 40% 40% 0% CP2 countriesa 398% 17% 36% 85% 152% 72% 0% Annex I countries excl. USAb 424% 1% 18% 68% 134% 49% 0% Impact of BAU: BAU Option 1 Option 2 Option 3 Option 4 levels based on constant 1% 2% 5% 10% 2009 emissions (UNFCCC) EU27* (net) 150% 3% 12% 36% 71% 42% i 0% Australia 4% 0% 0% 4% 4% 4% 0% Japan 19% 6% 12% 27% 27% 19% 0% New Zealand 40% 0% 0% 20% 40% 40% 0% CP2 countriesa 394% 17% 35% 84% 151% 71% 0% Annex I countries excl. USAb 821% 1% 36% 132% 260% 95% 0% Impact of average use of Option 1 Option 2 Option 3 Option 4 surplus instead of wedge 1% 2% 5% 10% assumption EU27* (net) 90% 2% 7% 22% 42% 38% i 0% Australia 0% 0% 0% 0% 0% 0% 0% Japan 12% 2% 7% 17% 17% 12% 0% New Zealand 20% 0% 0% 0% 20% 20% 0% CP2 countriesa 199% 9% 17% 42% 76% 52% 0% Annex I countries excl. USAb 211% 0% 9% 34% 67% 34% 0% 5 6* The numbers for the EU27 only applies for the pledge of 30%, as for the 20% reduction pledge, the EU has 7decided not to use surplus units to reach their pledge 8a All Annex I countries excluding the USA, Japan, Russia, Canada and Croatia 9b Annex I countries excluding USA, Turkey and Croatia 10i treating EU as individual countries. 11Source: Calculated from Surplus AAU Check Tool of PIK and UNEP Risoe CDM/JI Pipeline Analysis and 12 Database, 1 February 2012 (SI) 13

14References:

15Nabel JEMS, Rogelj J, Chen CM, Markmann K, Gutzmann DJH, Meinshausen M (2011) 16Decision support for international climate policy - The PRIMAP emission module. 17Environmental Modelling and Software 26:1419-1433.

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