Early action

Preston B.L. and Jones R.N. Climate change impacts on Australia and the benefits of early action to reduce global greenhouse gas emissions. 2006 retrieved from http // csiro.au/files/p6fy.pdf. 

However, the major conclusion of the Stern Review, is that the benefits of strong and early action far outweigh the economic costs of not acting. Mitigation, i.e., taking... 

An action plan can be used to monitor the progress toward a service start date. An action plan makes apparent that any delays in early actions could push back other activities and, ultimately, implementation of the service. Any late activities should be addressed immediately to limit delays. Also, sometimes actions can take longer than expected owing to an underestimate of time needed for completion. Updated versions of the action plan are likely to be needed, especially in pharmacies with little experience in implementing new services. 

In negotiating allocation plans for future periods, governments will inevitably find it hard to ignore the latest information on emissions. For example, upon releasing the verified emissions data for 2005, the European Commission suggested that these should be considered in allocation plans for the period 2008-2012. Yet, such updating creates a potential problem, sometimes known as the early action problem if free allocations continue and industries expect future allocations to reflect recent emissions, this undermines the incentive to reduce emissions now. 

Allocating allowances for the period 2008-2012 to existing facilities based on historic emissions does not in itself create any adverse incentives. However, if companies expect that the allocation for the period post-2012 will be based on their emissions in the coming years, then this distorts their operational and investment decisions - for example, deterring early action. If free allowance... 

The plan may accommodate early action and shall contain information on the manner in which early action is taken into account. Benchmarks derived from reference documents concerning the best available technologies may be employed by Member States in developing their National Allocation Plans, and these benchmarks can incorporate an element of accommodating early action. 

Kastrati A, Mehilli J, Schuhlen H, et al. Intracoronary stenting and antithrombotic regimen-rapid early action for coronary treatment study investigators. A clinical trial of abciximab in elective percutaneous coronary intervention after pretreatment with clopidogrel. N Engl J Med 2004 350(3) 232-238. 

Daudet, F., Augeron, C., Ollivier-Bousquet, M. 1981. Early action of colchicine, ammonium chloride and prolactin on secretion of milk lipids in the lactating mammary gland. Eur. J. Cell Biol. 24, 197-202. 

Annex in lists eleven criteria to be respected or taken into account in the allocation plan. Some of the criteria have a mandatory character (e.g. the need for consistency with a Member State s Kyoto target and the obligation to include a list of covered installations with allocated amounts per installation), while others are of an optional nature (e.g. accommodation of early action). The common character of the criteria is that they are of a principled and general rather than operational nature. This means that Member States have considerable freedom to implement the criteria, while the Commission has no clear guidance for the assessment of plans. 

The guidance could not and did not change the rather general character of the allocation criteria and the Commission could therefore not make the application of the criteria much more operational. In some instances, e.g. on criterion 6 on new entrants and criterion 7 on early action, it elaborated alternative options for implementing... 

Free allocation based on recent emissions is widely perceived as unfair, as it results in the allocation of more allowances to less carbon-efficient installations and fewer allowances to better-performing installations. As an expression of the recognition of the downside of such an allocation approach Annex in of the Directive makes reference both to benchmarking (in criteria 3 and 7) and to accommodating early action (criterion 7). However, a strong lesson that emerges from the first allocation round is that the attempt to introduce a wide spread around recent or current emission levels at installation level met strong political... 

The government decided that sector allocations should be divided among corresponding installations based on historical emissions. They also chose to make use of the broadest range of data available, in part as a way to credit early action by individual operators. Installation-level allocations would be based on the share of historical emissions... 

Following very intensive tests, discussions and political disputes about models that were in part extremely complex, a comparatively simple but also undifferentiated early action rule was implemented. The allocation for those emission quantities of the base period 2000-2002, for which the early action facts are taken into account, takes place for a time period of twelve years following the conclusion of the measure with a compliance factor of one. The allocation precisely corresponds to the emissions in the base period of 2000-2002. Accordingly, the following emissions are acknowledged ... 

As a result, the total volume of emissions covered by the special allocation provision for early action constituted about 22% of the total allocated allowances with approximately 111 Mt CO2. Three-quarters of the early action allocations went to installations in East Germany (Figure 4.1). 

Figure 4.1. Early action allocation the German East-West divide.

The special provision for early action reduces the allocation by a further 0.64 percentage points. 

Data should cover a long period in order to take into account early action and the potential for CO2 reductions (see Emissions Trading Directive, Annex III, points 3 and 7). 

During the allocation process, it was argued that some kind of benchmarking allocation (allocation per unit of output) would be fair - in the sense that it would automatically take into account early action and... 

Actors that have carried out early actions will benefit, compared to the situation if a late base year is chosen... 

Actors that have carried out early actions will benefit less. 

In the Swedish NAP the period 1998-2001 is used as the basis for the allocation. In the FlexMex2 report of May 2003, it was recommended that a base year period of 1998-2001 should be used, where 2001 was the year for which the latest data were available. This was said to best achieve the balance between rewarding early actions while satisfying the needs for installations with a significant increase in production. However, it can be questioned whether this base year period rewards early action at all. 

Sweden has not rewarded emission reduction actions taken before 1998 in the NAP. On the other hand installations that have implemented reduction measures in the period 1998-2001 will be rewarded for these semi-early actions . 

The consultants recommendations were to use a two-stage distribution based on recent historic emissions, first allocating to economic sectors and then to installations, to allocate to known planned developments (KPD) from within the sectoral allocation and not to make adjustments for competitiveness impacts or early action. Recent years had the advantage of accounting for recent economic growth and provided transparency through verification, something that could not be achieved by the use of projections. 

Insufficient treatment of early action and cleaner technologies Benchmarking considered more accurate... 

The methodology has advantages in terms of verification and indirectly considers early action and cleaner technologies by favourably treating cogeneration and process emissions and by considering best available technologies (BATs) in the allocation to new entrants... 

Early action and clean energy, technological potential... 

Some of the objections to the NAP criticised the allocation methodology used, claiming that a benchmarking approach would be more appropriate and that there had not been a special treatment of cleaner technologies and early action. The short time available to carry out the allocation would have made it difficult to elaborate accurate benchmarks. It would also have been politically difficult to apply benchmarking because it would have been rejected by firms in sectors where it was technically feasible (e.g. the electricity sector), given the opposing views on allocation between firms. 

The response to the allegations on cleaner technology and early action was that the methodology used showed advantages over others... 

Obviously, there is an inherent incentive to argue that early measures have been taken to abate emissions. It is very difficult (or costly) for the government to verify those claims and to differentiate early actions from normal business practice activities. The NAP does not explicitly recognise early action, although it states that early action has been considered in an implicit manner , because allowances are allocated to cover all process emissions .4 The NAP has opted for simplicity in this regard because if an earlier reference period had been chosen to accommodate early action, then a problem with the quality of data might have resulted. 

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