A Framework for Various Approaches under the UNFCCC: Necessity or luxury? CEPS Special Report No. 70, 20 November 2012

In recognition that the world is moving towards a new climate change regime that in many ways will be very different from the world in which the Kyoto Protocol has been operating, climate negotiators and other specialists have begun to focus their attention on developing a “framework for variable approaches” (FVA). It is hoped that this new framework will prove more adaptable to national circumstances and more capable of catalysing new ideas, at the regional, national or sub-national level. This paper examines the assumptions, objectives, scope, components and functions of an FVA, with a view to creating the right conditions in which a well-functioning global carbon market can emerge.

The Future of the Clean Development Mechanism. Note on the report “A Call to Action” of the High-Level Panel on CDM Policy Dialogue. CEPS Special Report No. 71, 20 November 2012

The clean development mechanism (CDM) has been through a long and complex growing process since it was approved as part of the Kyoto Protocol. It was designed within the framework of the UNFCCC and the Kyoto Protocol, and reflected the political and economic realities of that time. To ensure its continued effectiveness in contributing to future global climate action and to reflect on how best to position the CDM to respond to future challenges, a high-level panel (HLP) was formed at the Durban climate change conference in 2011. Following extensive consultations, the panel published its report in September 2012. Through this Special Report, the CEPS Carbon Market Forum offers its reflections on findings and recommendations of the HLP, as well as, by extension, its own views on the future of the CDM. In the context of the latter, it explores the following questions: Is there a need for an instrument such as the CDM in the future? What ‘demand’ can it fill? In the roles identified under the first question, what can be done to adapt it and also continue to increase its efficacy?

Online Personal Data Processing and EU Data Protection Reform. CEPS Task Force Report, April 2013

This report sheds light on the fundamental questions and underlying tensions between current policy objectives, compliance strategies and global trends in online personal data processing, assessing the existing and future framework in terms of effective regulation and public policy. Based on the discussions among the members of the CEPS Digital Forum and independent research carried out by the rapporteurs, policy conclusions are derived with the aim of making EU data protection policy more fit for purpose in today’s online technological context. This report constructively engages with the EU data protection framework, but does not provide a textual analysis of the EU data protection reform proposal as such.

Copyright in the EU Digital Single Market. Report of the CEPS Digital Forum. June 2013

The scope and enforcement of copyright in the digital environment have been among the most complex and controversial subjects tackled by lawmakers all over the world for the last decade. Due to the ubiquitous use of digital technology, modern regulation of copyright inherently touches on numerous areas of law and social and economic policy, including communications privacy and Internet governance. Modernising the EU’s copyright framework is considered a key step towards achieving the goal of an EU Digital Single Market in the context of the ‘Digital Agenda for Europe’, an initiative launched by the European Commission in May 2010. How can the EU make copyright fit for purpose in the Internet age? What are the most suitable and realistic policy options to achieve the objective of a Digital Single Market in the creative content sectors? To give comprehensive answers to these questions, the CEPS Digital Forum formed a Task Force on Copyright in the EU Digital Single Market to foster a multi-stakeholder dialogue on the major challenges for copyright law in the online content sector today. Drawing on the discussions and input gathered by the Task Force, this report contains the conclusions and policy recommendations organised around three main themes: licensing rules and practices in the online music and film sectors, the definition and implementation of copyright exceptions in the digital environment and the present and future of online copyright enforcement in Europe.

Carbon leakage: an overview. CEPS Special Report No. 79, 6 December 2013

Carbon leakage is central to the discussion on climate policy, given the confluence of issues that are currently being debated, including the 2030 Energy and Climate Framework and the review of the EU carbon leakage list by 2014. Carbon leakage is the result of asymmetrical carbon policies, especially carbon pricing, and the resulting carbon cost, which affects the international competitive position of some EU industry and could displace production and/or investment, and the emissions of the activities displaced. This paper identifies the difference between carbon price and carbon cost to leakage exposed industry as one of two fundamental issues to be understood and addressed; lack of visibility on future climate policies and anti-leakage provisions is the other key issue. While this is a global issue, most of the experience has been accumulated in the EU. Carbon leakage is only one of the factors that could affect the competitive position of sectors, but it is difficult to attribute the impact of carbon costs versus other variables such as energy costs, labour, etc. Studies have predicted the risk of a significant amount of production leakage in a number of energy-intensive industries. To address the danger, they were included in the EU ETS carbon leakage list, which gave them access to free allowances. However, a limited number of studies undertaken after the end of the second trading period (2012) show little evidence of production leakage and asks the question whether the issue has not been blown out of proportion. The paper argues that the past may not be a good representation of the future, as it was heavily influenced by a high level of free allocation, the exceptional economic downturn, CO2 prices significantly below what was anticipated, as well as the potential for changes in some fundamental variables such as the shrinking pool of allowances available for free allocation. It emphasises the need for a well-informed debate in the EU on measures to address carbon leakage post-2020, underpinned by a number of options, and objective criteria to evaluate those options. It emphasises that the debate should cover both investment and production leakage, caused by both direct and indirect carbon costs.

The Composition and Drivers of Energy Prices and Costs in Energy-Intensive Industries: The Case of Ceramics, Glass and Chemicals. CEPS Special Report No. 85, 27 March 2014

In May 2013, the European Commission received a mandate from the European Council to “to present an analysis of the composition and drivers of energy prices and costs in Member States, with a particular focus on the impact on households, SMEs and energy intensive industries, and looking more widely at the EU's competitiveness vis-à-vis its global economic counterparts”. Following such mandate and in view of the preparation by the Commission of a Communication and a Staff Working Document, DG Enterprise and Industry commissioned CEPS to carry out a set of studies aimed at providing well-grounded evidence about the evolution and composition of energy prices and costs at plant level within individual industry sectors. A team of CEPS researchers conducted the research, led by Christian Egenhofer and Lorna Schrefler. Vasileios Rizos served as Project Coordinator. Other CEPS researchers contributing to the project included: Fabio Genoese, Andrea Renda, Andrei Marcu, Julian Wieczorkiewicz, Susanna Roth, Federico Infelise, Giacomo Luchetta, Lorenzo Colantoni, Wijnand Stoefs, Jacopo Timini and Felice Simonelli. In addition to an introductory report entitled “About the Study and Cross-Sectoral Analysis”, CEPS prepared five sectoral case studies: two on ceramics (wall and floor tiles and bricks and roof tiles), two on chemicals (ammonia and chlorine) and one on flat glass. Each of these six studies has been consolidated in this single volume for free downloading on the CEPS website. The specific objective was to complement information already available at macro level with a bottom-up perspective on the operating conditions that industry stakeholders need to deal with, in terms of energy prices and costs. The approach chosen was based on case studies for a selected set (sub-)sectors amongst energy-intensive industries. A standard questionnaire was circulated and respondents were sampled according to specified criteria. Data and information collected were finally presented in a structured format in order to guarantee comparability of results between the different (sub-)sectors analysed. The complete set of files can also be downloaded from the European Commission’s website: http://ec.europa.eu/enterprise/newsroom/cf/itemdetail.cfm?item_id=7238&lang=en&title=Study-on-composition-and-drivers-of-energy-prices-and-costs-in-energy-intnsive-industries The results of the studies were presented at a CEPS Conference held on February 26th along with additional evidence from other similar studies. The presentations can be downloaded at: http://www.ceps.eu/event/level-and-drivers-eu-energy-prices-energy-inten...

The Role of Market Mechanisms in a Post-2020 Climate Change Agreement. CEPS Special Report No. 87/May 2014

This special report is intended to serve as a background briefing document for the European Climate Platform seminar on Carbon Markets in the 2015 Agreement: Role and Architecture, but also raises issues of more enduring relevance in the wider debate about market mechanisms and the next climate change agreement. The paper looks at the relationship between the carbon market and a new climate change agreement, to be finalised in Paris in 2015. It tries to answer two key questions: does the carbon market have a role to play in a post-2020 agreement, and what is the role of a post-2020 agreement in the creation and operation of a carbon market? Introduction. The world has changed in many ways since 1997 when the Kyoto Protocol was adopted, along some critical axes, both from an economic and emissions points of view. Moreover, and this cannot be quantified, the appetite for global governance, especially for an agreement with such far-reaching implications as a climate change agreement, has diminished considerably. This paper looks at the relationship between the carbon market and a new climate change agreement, to be finalised in Paris in 2015. It tries to answer two key questions: does the carbon market have a role to play in a post-2020 agreement, and what is the role of a post-2020 agreement in the creation and operation of a carbon market?

Exploring a Regional Approach to EU Energy Policies. CEPS Special Report No. 84, 15 April 2014

Regional approaches to EU energy policies have been termed the ‘Schengenisation’ of energy, making reference to the Schengen Convention eliminating intra-European border controls. They aim to hone the effectiveness of EU energy policy objectives through enhanced policy coordination at the regional scale. Typically, this includes energy market integration while accounting for member states’ continued deployment of national-level policy instruments regarding the appropriate energy mix and the security of energy supply, which is foreseen in the EU Treaty. This report explores the potential for such regional approaches. It assesses lessons from existing initiatives, regional energy arrangements such as the Danube Energy Forum, the Mediterranean Energy Forum, the Pentalateral Energy Forum, the North Seas Countries’ Offshore Grid Initiative and the Nordic Co-operation partnership, to determine whether regional energy initiatives are an efficient, effective and politically acceptable approach toward reaching three EU energy policy objectives: competitiveness, supply security and sustainability. Regional approaches could possibly play an important role for governing EU renewables policy, which the European Commission has identified in the 2030 climate and energy framework as an important element for governance.

How to keep a competitive edge in the talent game: Lessons for the EU from China and the US. CEPS Task Force Report, 13 June 2014

This report is based on discussions within the CEPS Task Force on “The Quantity and Quality of Human Capital in Higher Education: Comparing the EU, the US and China", chaired by Jan-Eric Sundgren, Senior Adviser to the CEO of Volvo, and former President of Chalmers University of Technology in Gothenburg. It aims to draw salient lessons from the successes and failures in higher education practices in the EU, the US and China by comparing key education indicators and policy trends. Against the background of the profound tectonic shifts affecting the talent distribution around the world, which is fundamentally changing the global ‘brain game’, the authors argue that it is important that the EU as a whole creates ‘virtuous circles’ of talent and innovation to sustain prosperity and growth, as well as to secure the long-term well-being and quality of life in Europe.

Exploring a Regional Approach to EU Energy Policies. CEPS Special Report No. 84, April 2014

Regional approaches to EU energy policies have been termed the ‘Schengenisation’ of energy, making reference to the Schengen Convention eliminating intra-European border controls. They aim to hone the effectiveness of EU energy policy objectives through enhanced policy coordination at the regional scale. Typically, this includes energy market integration while accounting for member states’ continuing deployment of national-level policy instruments regarding the appropriate energy mix and the security of energy supply, which is foreseen in the EU Treaty. This report explores the potential for such regional approaches. It assesses lessons from existing initiatives, regional energy arrangements such as the Danube Energy Forum, the Mediterranean Energy Forum, the Pentalateral Energy Forum, the North Seas Countries’ Offshore Grid Initiative and the Nordic Co-operation partnership, to determine whether regional energy initiatives are an efficient, effective and politically acceptable approach toward reaching three EU energy policy objectives: competitiveness, supply security and sustainability. Regional approaches could possibly play an important role for governing EU renewables policy, which the European Commission has identified in the 2030 climate and energy framework as an important element for governance.

Between energy security and energy market integration. Guidelines for the future development of the EU’s external energy policy in Europe’s neighbourhood. OSW Report, June 2011

For many years the European Union has been improving the efficient use of energy resources and yet the demand for energy in the EU continues to increase. When Europe belonged to one of the world’s key energy markets with relatively easy access to energy resources, growing energy needs were not seen as a source of concern. Today, however, as the competition for energy resources is intensifying and the global position of the EU energy market is being challenged by growing economies in the developing countries, above all China and India, the EU needs to adopt bold policies to guarantee the sustainable supply of energy. This report argues the EU needs to develop a fully-fledged external energy policy; i.e. a common, coherent, strategic approach that build bridges between the interests and needs of the EU integrated energy market on the one hand and supplier countries on the other. The EU’s external energy policy has two main objectives. The first one is to ensure a sustainable, stable and cost-effective energy supply. The second is to promote energy market integration and regulatory convergence with neighbouring countries (often but not always this supports the achievement of the first objective). However, in order to improve its effectiveness, the EU’s external energy policy needs to be seen in a broader economic and political context. Any progress in energy cooperation with third countries is contingent upon the EU’s general stance and offer to those countries.

Transnistrian Conflict after 20 years: A Report by an International Expert Group. OSW Report, October 2011

The present report is the result of an initiative put forward in 2010 by the Soros Foundation Moldova (East East: Partnership Beyond Borders Program) with the aim of attracting new foreign expertise to provide a fresh look at the ‘frozen conflict’ in the Republic of Moldova. The initiative was informed by the conviction that the political shifts in and around Moldova that have occurred since 2009 are creating new opportunities to resolve the conflict. The idea was to convene a joint group of international and Moldovan experts who, after conducting a fact-finding field trip to Chisinau and Tiraspol and conducting extensive discussions, would draw up a report with their analysis of the situation and their political recommendations.

Gazprom’s expansion in the EU: co-operation or domination? OSW Report, October 2009. Second edition, revised

Introduction. The energy sector, especially with regard to the gas trade, is one of the key areas of co-operation between the EU and Russia. However, the form this co-operation has taken has been giving rise to some concern, both in Brussels and in the EU member states. Questions arise as to whether the EU has not become excessively dependent on Russia for energy, and whether the presence of the Russian gas monopoly in the EU does not enable Russian interference with the development of EU energy policy. The objective of this series of OSW reports (for the previous edition,see Gazprom’s expansion in the EU: co-operation or domination? April 2008 – pdf 1.2 MB) is to provide facts which will permit an accurat answer to these questions to be formulated. Over the course of last year, two new factors strongly affected Gazprom’s capability to operate on the EU market. One was the ongoing global economic crisis, which has depressed demand for gas both in Russia and in Europe. Gazprom has cut both its own production and the quantities of gas it purchases from the Central Asian states, and the decrease in export revenues has forced the company to modify some of its current investment plans. Less demand for gas and the need to reduce production are also having a positive impact – the Russian company is likely to avoid the difficulties in meeting all of its export commitments which, only a year or so ago, it was expected to experience. The other factor affecting Gazprom’s expansion in Europe is the observed radicalisation of the rhetoric and actions of both the company itself and of the Russian authorities with regard to the gas sector as broadly understood. The gas crisis between Russia and Ukraine in January 2009, which resulted in a two-week interruption of gas supplies from Russia to Europe via Ukraine, was the most prominent example of this radicalisation. The hardening of rhetoric in the ongoing energy talks with the EU and other actors, and increased political and business activities designed to promote Russian gas interests in Europe, in particular the lobbying for the Nord Stream and South Stream projects, are further signs of this shift in tone. These issues raise the question of whether, and to what extent, the current condition of Gazprom’s finance will permit the company to implement the infrastructural projects it has been endorsing and its other investment plans in Europe. Another important question is whether the currently observed changes in how Gazprom operates will take on a more permanent character, and what consequences this will have for the European Union. The first part of this report discusses Gazprom’s production and export potential. The second comprehensively presents the scope and nature of Gazprom’s economic presence in the EU member states. Finally, the third part presents the Russian company’s methods of operation on foreign markets. The data presented in the report come mainly from the statistics of the International Energy Agency, the European Commission and Gazprom, as well as the Central Bank of Russia and the Russian Statistical Office. The figures presented here also include proprietary calculations by the OSW based on figures disclosed by energy companies and reports by professional press and news agencies.

Scenarios for the Agricultural Sector in the Southern and Eastern Mediterranean. MEDPRO Report No. 4, March 2013

The paper builds predictive scenarios for the agricultural sector of eleven southern and eastern Mediterranean countries (SEMCs), namely Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria, Tunisia and Turkey. First, it assesses the performance trends of the SEMCs’ agricultural sector, with a focus on production, consumption and trade patterns, incentives, trade protection policies and trade relations with the EU, productivity dynamics and their determinants. Second, it presents four scenarios based on the main value chains of the SEMCs’ agriculture sector: animal products, fruit and vegetables, sugar and edible oils, cereals, fish and other sea products. The four scenarios are: business as usual, Mediterranean – one global player, the EU-Mediterranean area under threat and the EU and SEMCs as regional players on the global stage.

Macroeconomic Scenarios for the Euro-Mediterranean Area Quantification based on the GEM-E3 Model. MEDPRO Report No. 7, July 2013

Four alternative macroeconomic scenarios for southern Mediterranean countries are quantified in this study with the use of GEM-E3, a general equilibrium model. These are i) the continuation of current policies (business-as-usual scenario), ii) southern Mediterranean–EU cooperation (Euro-Mediterranean Union scenario), iii) a global opening of the southern Mediterranean countries and cooperation with the rest of the Middle East and other developing countries like China (Euro-Mediterranean alliance scenario), and iv) a deterioration in the regional political climate and a failure of cooperation (Euro-Mediterranean under threat scenario). Explicit assumptions on trade integration, infrastructure upgrade, population and governance developments are adopted in each scenario. The simulation results indicate that an infrastructure upgrade and governance improvements in the context of southern Mediterranean–EU cooperation could benefit most of the countries under consideration. The analysis remains important in light of ongoing regional developments and the need to design the best policies to pursue in the aftermath of the Arab spring.