VZCZCXRO5374
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSL RUEHSR
DE RUEHVI #0743/01 1730623
ZNR UUUUU ZZH
R 220623Z JUN 09
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC 2774
INFO RUCNMEM/EU MEMBER STATES
RUEAEPA/EPA WASHDC
RHEBAAA/USDOE WASHDC

UNCLAS SECTION 01 OF 02 VIENNA 000743 
 
SIPDIS 
 
STATE FOR OES/EGC (FENDLEY) AND EUR/CE 
EPA FOR OIA (ALMEIDA) 
 
E.O. 12958: N/A 
TAGS: SENV KGHG ENRG EIND ECON AU
SUBJECT: Climate Change: Austria to Exceed Kyoto, 2020 Emissions 
Targets by Wide Margins 
 
REFS:  (A) VIENNA 54; (B) VIENNA 272 
 
¶1. SUMMARY:  According to the latest "Climate Report" of the 
Austrian Environmental Agency (AEA - comparable to the U.S. 
Environmental Protection Agency), Austria emitted 88 million tons of 
CO2 equivalent (mtCO2e), 11% above 1990 levels and about 24% above 
Austria's Kyoto Protocol commitment.  Projecting out to 2020 (the 
EU's target year), Austria would not reduce emissions at all under 
current policy (whereas Austria is mandated to reduce by 16%).  The 
share of renewables in the Austrian energy mix would rise to 31% in 
2020 (the EU climate package mandates 34%).  Even under the 
demonstrably inadequate current policy, Austria's large industries 
are going to court over "unfair" allocation of emissions allowances. 
 End summary 
 
2020 Targets: Renewables Doable, Emissions Nowhere Close 
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¶2. The AEA has modeled Austria's performance under the EU Climate 
and Energy Package for 2020, concluding that the GoA must go far 
beyond its current "Climate Strategy" to reach its binding emissions 
reduction of 16% (from a base year of 2005).  Under current and 
planned measures, AEA sees CO2 emissions remaining flat at 88 mtCO2e 
in 2020 (i.e. no reduction from 2005).  The situation is better for 
renewable energies, whose share of the energy mix will grow from 23% 
to 31% without substantial additional efforts, AEA estimates.  That 
still falls short of Austria's 34% goal in the climate and energy 
package. 
 
¶3. AEA Head of Air Quality Juergen Schneider told us that the 
current economic slump will dampen greenhouse gas emissions this 
year and next, but the effect is not sustainable (the AEA's 
calculations are based on 2007 and preliminary 2008 figures). 
Measures to stimulate economic activities should also serve climate 
protection, he said.  Schneider sees thermal retrofitting of 
buildings (currently only 1% of buildings are being renovated for 
energy-efficiency) and upgrading public transportation as the top 
priorities, along with accelerated introduction of more efficient 
cars (including electric vehicles). 
 
Still Exceeding 2008-2012 Kyoto Targets 
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¶4. Austria's consolidated greenhouse gas emissions in 2007 (2008 
figures not yet available) are still 19.2 mtCO2e above its Kyoto 
target for the 2008-2012 period (68.8 mtCO2e).  Net of emissions 
trading, Joint Implementation/Clean Development measures, and 
afforestation projects, it still exceeds the target by about 8 
mtCO2e.  Raw emissions fell by 4% compared to 2006, mainly due to 
less heating because of warmer weather.  Main emissions vectors in 
2007 were industry (29.2%), transport (27.6%), energy supply (15.9%) 
and residential heating (12.6%). NOTE: about 80% of emissions caused 
by industry and energy supply are subject to emissions trading. 
 
¶5. Agriculture and Environment Minister Niki Berlakovich, in a first 
reaction to the AEA report, highlighted the "encouraging" 
year-on-year reduction in GHG emissions in 2007.  He pleaded for 
collaborative efforts to reach Austria's goals.  AEA expert 
Schneider, however, is not optimistic about further policy measures 
-- pointing out that even now, the GoA is only implementing about a 
third of the measures foreseen in its official climate strategy. 
Austria's environmental NGOs say that all economic stimulus measures 
should contribute to the climate protection goals -- but Post 
estimates that only about 10 percent of Austria's economic stimulus 
packages is unambiguously pro-climate (ref B). 
 
More Emphasis on Adaptation 
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¶6. On June 12, the Agriculture and Environment Ministry published a 
draft "National Adaptation Strategy" emphasizes that as a 
"sensitive" alpine country, Austria will suffer more than others 
from windstorms, floods, glacial melting, drought, and declining 
ground water.  Proposed adaptation measures include water-saving 
irrigation systems, introduction of water-saving and heat-tolerant 
plants (COMMENT: but rejecting any genetic biotechnology - END 
COMMENT), reduced water consumption, and more research on energy 
storage possibilities.  The paper is open for discussion this year 
and should be adopted in 2010. 
 
Heavy Industry Suing for More Free Allowances 
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¶7. The GoA's policy of allocating free emissions allowances under 
the EU Emissions Trading System (ETS) is being tested by large 
industries who feel "under-allocated" compared to smaller 
enterprises.  Led by Austrian steel producer "Voestalpine," they 
 
VIENNA 00000743  002 OF 002 
 
 
have sued the GoA, alleging an "unfair" allocation according to the 
EU Emissions Trading System (ETS) causing "competitive distortion." 
Big cement and steel industries particularly Voestalpine, which 
emits more than a third of Austria's emissions in its 10 facilities 
(out of 210 under the ETS in Austria), argue that the allocation 
formula is based on outdated data from 2002 to 2005.  Under the 
current scheme, Voestalpine would have to purchase allowances for up 
to EUR 40 million on the free market in the current ETS period 2008 
to 2012.  Steel and cement firms say other industries such as the 
paper industry are emitting significantly less CO2 than expected due 
to the economic crisis and not because of investments in efficiency. 
 The lawsuit is currently under consideration in Austria's 
Constitutional Court. 
 
COMMENT 
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¶8. (SBU) Austria's climate policy remains highly problematic.  The 
GoA consistently violates its commitments under the EU Kyoto Burden 
Sharing Agreement -- with no significant improvement in recent years 
-- and is now left with the paradoxical hope that a sustained 
economic crisis will bring performance closer to targets.  Unless 
policies change, emissions performance will barely improve by 2020 
and legal demands by large CO2 emitters may further widen Austria's 
performance gap.  The only bright spot for the Austrians is that 
reaching a 34% renewables share appears achievable in 2020 -- 
ironically, a target the GoA termed impossible as recently as the 
December 2008 European Council.  END COMMENT. 
 
ORDWAY