Taking a break for a moment from domestic politics, let’s turn to our supposed model for rationing GHG emissions: Europe.

The EU has just released its report to the UNFCCC, “Annual European Community greenhouse gas inventory 1990–2006 and inventory report 2008” (summary here). The short version of the story is that the report does not support either a claim that the EU is “on track” to meet emission reduction promises (or that the ETS is a success).

The EU-15 saw GHG increases due to electricity production and transport. (The EU-15 is “Europe” for Kyoto purposes; 10 of the remaining EU-12 are covered under Kyoto, but thanks to the gift of the 1990 baseline, demanded for reasons of the subsequent economic collapse, none of these threaten to approach their allotted emissions.)

Substantial increases in GHG emissions between 2005–2006 took place in the following source categories:• CO2 emissions from public electricity and heat production ( 6.1 million tonnes or 0.6 %)CO2 emissions from public electricity and heat production increased mainly in Denmark, Finland and the United Kingdom…[and]• HFC emissions from refrigeration and air conditioning ( 2.9 million tonnes or 8.1 %) mainly in France and Germany.

The big increases were found in Denmark and Finland, with expected reductions not materializing in the UK:

In Denmark and Finland, this was mainly due to increased electricity production in coal-fired powerstations and decreased net imports of electricity. In Finland, reduced electricity production from hydropower was another reason for the emission reduction. In the United Kingdom, the decrease in CO2 emissions was mainly caused by a fuel shift from gas to coal.

The latter point of course makes no sense, given coal’s higher CO2 intensity. The UK did add more coal use, and its emissions did drop, if less than hoped for at -0.5 percent. But one obviously didn’t cause the other. Also recall that Denmark is held up as a model — a country that reduced emissions by imposing a carbon tax. Of couse, that reduction actually came in one year, and was due to a decision to import electricity instead of producing it. Not surprisingly, when the Danes reverted to producing it, emissions went back up.

The rest of the EU-15 saw emissions stay flat for the year or tick slightly downward, with the exception of Portugal (-4.8 percent) and Belgium (-3.8 percent). Portugal is now only 41 percent over their baseline figure and 27 percent above their substantially revised Kyoto promise to not increase emissions over that 1990 baseline by more than 27 percent.

Belgium’s reduction (-3.8 percent), actually leaves them 5.5 percent below their baseline emissions, leaving them just 2 percent from their (slightly reduced) Kyoto promise of -7.5 percent.

It is not easy to discern from the report reasons for either country’s reduction (and the Summary provides no explanation). The following may appear to be getting into the weeds a bit, but stick with me for a few paragraphs: Belgium’s reduction has clearly come elsewhere than CO2, given that it’s 2006 CO2 emission levels were the same as 1990 levels (page 74). My guess is that the key is found in this paragraph on page 121, indicating that it is quite possibly a paperwork gimmick and illusory:

In Belgium, the IEF factor [“implied emission factor,” here, for N20] fell from about 71 t/Tj in 1990 to 48 t/Tj in 2006, although with significant variations during the period. The IEF is also the lowest of all EU countries. There are two reasons for its relatively low IEF: the reported activity data includes both own use of fuels as well as the calculated differences between input in refineries and output. This difference is considered a ‘loss’, which was particularly high in 2006, and it is not reflected in the emissions from this key source category. The reported loss will be looked at in more depth, which may result in a revised 2006 estimate in a future submission. Moreover, another reason for the decrease in the IEF was the increasing share of refinery gas from 1990 to 2006 which has a much lower IEF compared to other liquid fuels.

There’s something funny going on with Belgian data, which only matters in that its claim to a reduction could be the difference between the EU-15 being at, above, or below 1990 emission levels – not the promised reduction, but the psychologically important baseline figure itself. For example, Table 3.19 (p. 132 of 587) offers “Manufacturing Industries and Construction: Contribution of MS to EU-15 recalculations in CO2 for 1990 and 2005 (difference between latest submission and previous submission in Gg of CO2 equivalents and percent)”. Belgium, strangely, is the only Member State carrying the tag: “No explanation provided.” Yet the Belgians claim a substantial contribution to a lower EU-15 emission figure from Iron and Steel manufacturing.

Other oddities persist, such as “Germany reports emissions for the years 1995 to 2001 only” for “Food processing beverages and tobacco – Gaseous CO2 (page 152). Not reporting emissions from certain sectors is one way to keep emission increases to a minimum.

Now, about the reductions. In 2006, “Lower CO2 emissions [came] from households and services …One important reason for the decrease are warmer weather conditions. The number of heating degree days decreased by 3.3 % between 2005 and 2006 . . . [although] Germany reported substantial increases.”

Other reductions came mostly from reduced petroleum refining and production-method changes (in nitric and adipic acid production). [Some U.S. companies adopted some of these same practices — which is why they pushed for Lieberman-Warner to include “early action credits.” My CEI colleagues found that DuPont, which reduced adipic acid production due to a change in business lines, would have enjoyed a windfall profit in ration coupons to sell under the Lieberman-Warner regime.]

In sum, the EU is still not on track to meet its emission-reduction promises, a claim ritually repeated as recently as this week by EU Commission President Barosso. There is nothing in the data to suggest that the ETS is working, either.

I will post later on the contribution of this report to the strange odyssey of Europe’s 1990 baseline figures, which as I have noted have proved wonderfully receptive to revision well after the fact.