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4 p. Cities are becoming key actors to successfully achieve climate change mitigation and adaptation objectives. . -Science can play a crucial role in supporting local decision-makers by providing top level information and applying or developing ad-hoc methodologies . -The case studies presented here show that there are many opportunities for science-policy collaboration at the city level . -The urban scale allows a higher visibility of this collaboration and can contribute to strengthening this link at different scales.

4 p. The Paris Agreement is the basis for increased, transparent and coordinated action of all countries. -The key of the success was the extraordinary transparency and confidence throughout the process. - While the Kyoto protocol covered 14% of emissions, 98% of emissions are covered by the new regime. -Countries will increase ambition every 5 years for closing a gap of, currently, 15 gigatonnes. -The goal of mobilizing $100 billion per year for climate aid will be revised onwards from 2025.

4 p. Public participation in the development of science and technology is key in modern societies, and scientists’ understanding of their responsibility and agency within this practice is still underexplored. - Face-to-face forms of science communication are the most commonly reported. - Scientists see science communication as a social responsibility, and they feel responsible to carry it out well. - Scientists describe successful science communication as that which, primarily, brings something positive to its audiences. - Learning about the audience, communicating science-in-the-making, and collaborating with other disciplines (i.e. artists), are seen as the most critical factors for successful science communication.

•There is an increasing urgency of decarbonising the EU transport sector. •Biofuels are expected to play a significant role in the transition to a low-carbon economy. •The EU has intensively promoted biofuels since 2000, reaching 5-6% of liquids consumption. •Controversies have focused on indirect land use changes and competition with food production. •In view of the scientific evidence, a new ILUC Directive was adopted in September 2015.

4 p. The Lima summit was not expected to achieve specific agreements on the reduction of emissions, but to establish the bases of a legal document to be agreed on at the next meeting in Paris (December 2015) and of the Intended Nationally Determined Contributions (INDC). And that is precisely what happened. *In the coming months, each country will define its mitigation commitments as of 2020. The United Nations will then calculate the gap between voluntary pledges and the reductions that are required to keep global temperature increase below 2ºC. Thus, the Parties will have a solid, common basis on which to negotiate in Paris how to address the said gap. *This is the first time ever that all countries are willing to assume very important greenhouse gas reductions. It is the end, after two decades of climate negotiations, of the differentiation between countries due to their level of industrialisation based on the Annexes of the Kyoto Protocol. *In Lima an announcement was made of new contributions to the Green Climate Fund, which already stands at US$10.2m. Progress is therefore being made with the previously assumed (and reiterated in the new text) commitment by developed countries to support mitigation and adaptation in developing countries with US$100b by 2020. *The first steps were also taken towards greater integration of national policy with other decision-making levels, and towards greater consideration of the gender dimension in climate policies.

6 p. Consensus was reached on the text on which the future global agreement in Paris 2015 on cutting emissions will be based. The countries will have to explain by means of biannual reports from 2014 onwards how they are going to fulfil the funding pledge in the long term. The establishing of requirements for the measuring, reporting and verification of emissions cuts and the financial flows remained pending. *The declarations by Japan, Australia and Canada on their mitigation plans increased concern about the viability of keeping temperatures below the danger level. Brazil’s proposal to develop a methodology for the distribution of mitigation efforts based on historical responsibility was not successful. *The disagreement between developed and developing countries remains in terms of the priority to fix the mitigation ambitions as opposed to that of fixing financial support and the transfer of capacities and technology. *The “Warsaw International Mechanism” and the “Warsaw Framework for REDD+” were set up. The first one, whose functioning has yet to be determined and which has no budget, is intended to address loss and damage. The second contains funding systems for REDD+ actions, together with methodological questions, and has an initial budget of 280 million dollars. *It was agreed that support should be given to the Adaptation Fund (which was provided with an additional amount of over 100 million dollars), the Clean Development Mechanism and the Joint Implementation, the continuity of which is in danger in view of the current price of carbon.

6 p. Consensus was reached on the text on which the future global agreement in Paris 2015 on cutting emissions will be based. The countries will have to explain by means of biannual reports from 2014 onwards how they are going to fulfil the funding pledge in the long term. The establishing of requirements for the measuring, reporting and verification of emissions cuts and the financial flows remained pending. *The declarations by Japan, Australia and Canada on their mitigation plans increased concern about the viability of keeping temperatures below the danger level. Brazil’s proposal to develop a methodology for the distribution of mitigation efforts based on historical responsibility was not successful. *The disagreement between developed and developing countries remains in terms of the priority to fix the mitigation ambitions as opposed to that of fixing financial support and the transfer of capacities and technology. *The “Warsaw International Mechanism” and the “Warsaw Framework for REDD+” were set up. The first one, whose functioning has yet to be determined and which has no budget, is intended to address loss and damage. The second contains funding systems for REDD+ actions, together with methodological questions, and has an initial budget of 280 million dollars. *It was agreed that support should be given to the Adaptation Fund (which was provided with an additional amount of over 100 million dollars), the Clean Development Mechanism and the Joint Implementation, the continuity of which is in danger in view of the current price of carbon.

30 p. In this paper we evaluate two alternative CCS technologies of a coal-fired power plant from an investor’s point of view. The first technology uses CO2 for enhanced oil recovery (EOR) paired with storage in deep saline formations (DSP) and the second one just stores CO2 in DSF. For projects of this type there are many sources of risk, and three sources of uncertainty stand out: the price of electricity, the price of oil and the price of carbon allowances. In this paper we develop a general stochastic model that can be adapted to other projects such as enhanced gas recovery (EGR) or industrial plants that use CO2 for either EOR or EGR with CCS. The model is calibrated with UK data and applied to help understand the conditions that generate the incentives needed for early investments in these technologies. Additionally, we analyse the risks of these investments.

29 p. Energy labels are used to promote the purchase of efficient appliances. Many countries in Europe use subsidies (namely energy efficiency rebates) to support these purchases as it is the case of Spain. A figure ranging from 50 to 105€ subsidy has been granted in the past for the acquisition of the most efficient appliances. This paper first analyses the impact of a 80€ subsidy on the dishwasher market and compares the results with a 40 € tax for non-labelled ones. The results take into account the effects that the policies generate in the market segment that is a close substitute, that is, cross effects. The paper shows that the subsidy is expensive for the Government, generates some welfare losses and it also generates a rebound effect as a consequence of the increase in the total number of appliances sold. The 40 € tax does not cost money to the Government, it generates a lower welfare loss and reduces the energy bill. However, the analysis is extended to go beyond the two extreme scenarios: subsidies without taxes and taxes without subsidies. Different combinations of both instruments are suggested and they are assessed based on their performance regarding economic efficiency, environmental effectiveness and political feasibility.

30 p. This paper estimates the economic value that consumers place on energy efficiency (EE) labels for appliances in the Spanish market. It uses the hedonic method to calculate the price premium paid in the market for that attribute isolated from others. Furthermore, the Quantity Based Demand System (QBDS) is applied to calculate the own and cross price elasticities of demand for both EE appliances and others. These elasticities are useful for improving the design of policies to promote EE. The paper looks at three different appliances marketed in Spain during 2012: washing machines, fridges and dishwashers.

31 p. The potential of taxation to correcting environmental externalities has been long recognized among economists. Yet, this welfare-enhancing policy commonly faces strong opposition by citizens. Conversely, externality-correcting subsidies frequently enjoy high levels of public acceptance. We conduct a lab experiment to explore public support for Pigouvian taxes and subsidies. In an experimental market with a negative externality, participants vote on the introduction of Pigouvian taxes and subsidies under full or partial information concerning how the tax revenues will be spent and the subsidy paid for. Theoretically the two instruments should produce identical outcomes. We find substantially greater support for subsidies than taxes. This can partially be explained by the expectation that the subsidy will increase payoffs more than a tax, but not because it could be more effective in changing behavior. Furthermore, we find that under partial information, the preference for subsidies is even stronger.

4 p. * Carbon dioxide capture and storage (CCS) is one of the technologies for fighting climate change in the future. The use of CO2 for enhanced oil recovery (EOR) paired with storage in deep saline formations (DSF) could effectively help to support CCS demonstration projects, reduce costs and thus guarantee the future economic viability of power plants incorporating both EOR and CCS. * CCS without EOR is highly unprofitable at both current and expected carbon market prices. * The profitability of these technologies is highly influenced by the volatility of future electricity prices, oil prices and carbon allowance prices. * Investment in EOR and secondary DSF storage can only be profitable with a long-term equilibrium price for oil higher than $51/barrel. When the investment decision can be made at any time the trigger value for optimal investment is significantly higher at $89/barrel. However, an increase in the investment cost can substantially raise these trigger prices.

4 p. There is a considerable body of research about the use and design of market instruments for mitigating greenhouse gas emissions. However, discussion of the combination of instruments and their possible interactions is in its infancy. This paper proposes a specific combination of instruments (an emission allowance market such as the one already in place in Europe for energy-intensive sectors and a tax on CO2 for the rest) and analyses the effects of four possible distributions of mitigation objectives. We also analyse what happens if the tax on CO2 is replaced by other closely related taxes. Our findings suggest that a combination of market instruments is needed if emissions are to be reduced cost-effectively. However, it is essential to design the right combination of instruments to prevent costs from becoming excessively high.

4 p. This article uses an statisticalmethod to estimate the price premium paid for the highest energy-efficiency label (A+) in the refrigerators market of the Basque Autonomous Community (Spain). The estimated figure is 8.9% of the final price or about 60 euro, which represents one third of the energy savings that a consumer gets during the lifetime of a refrigerator with the highest energy-efficiency label. This figure is then combined with the conditions from a theoretically supported demand systemto calculate the sensitivity of the demandfor refrigerators to own and cross-price variations. The results indicate that the demand for refrigerators with the highest energy-efficiency label is highly sensitive to price variations. The information presented here can bevery useful for policy design and analysis.

4 p. The Cancun Summit started with the conviction that a binding agreement would not be possible and with significantly lower expectations than the previous summit in Copenhagen. If the outcome of the summit had to be defined, it could be claimed to be moderately satisfactory given the context in which it took place. The reader should be aware of the limited scope of the agreements and progress that can be achieved in this type of summits where the negotiating stakeholders (or countries) number over two hundred and the nature of the texts discussed is subject to tenacious qualification and discussion prior to their formal approval. The agreement reached in Cancun – which verged on unanimous (with only Bolivia opposing it) –enables significant progress to be made in terms of measures to adapt, reduce deforestation and set up financial aid for developing countries. Furthermore, they leave the way open to a binding agreement to reduce emissions at the forthcoming Durban summit (South Africa) in 2011 to consolidate the Kyoto protocol. We believe that this can be qualified as a moderate success. This document performs an initial assessment of the Cancun summit agreements (formally COP 16 and CMP 6) based on the drafts of the official documents of the United Nations Framework Convention on Climate Change (UNFCCC), the information obtained by the authors from part of the team being present at the summit as observers and the opinions of observers and international analysts.

21 p. This article uses the hedonic pricing method to estimate the price premium paid for the highest energy-efficiency label (A+) in the refrigerators market of the Basque Autonomous Community (Spain). The estimated figure is 8.9% of the final price or about 60 euro, which represents one third of the energy savings that a consumer gets during the lifetime of a refrigerator with the highest energy-efficiency label. This figure is then combined with the linear version of the Almost Ideal Demand System (LA/AIDS) to obtain own and cross-price elasticities of demand. The information presented here is useful for policy design and analysis. The results indicate that the demand for refrigerators with the highest energy-efficiency label is highly sensitive to price variations.

25 p. Making decisions about optimal investments in green infrastructure necessitates setting social discount rates. This paper suggests a practical way for determining the discount rate for projects or programmes in which one of the options is to maintain or improve land in its natural state. We propose an “equivalency principle†to derive a simple rule that sets the discount rate. The rule is based on the premise that the long term value of a naturally preserved land track ought to be at least the same as the value of an identical land track in the vicinity to which permission has been granted for development. We illustrate this principle with various case studies and we apply it to a contentious investment project in the Basque Country associated with the regeneration of a large scale harbour in the province of Gipuzkoa (North of Spain) that involves reclaiming natural land that has important ecological value, including for the conservation of a marine ecosystem.

4 p. This article uses the hedonic approach to estimate how much is paid for energy efficiency in the dishwasher market in Spain. The estimations suggest that 15.6% of the final price is paid for the characteristic represented by the A+ label. This accounts for about 80€ of the average price. We use this estimate combined with a demand system to obtain own and cross price elasticities of demand, vital for policy designing and analysis. This is done by combining the use of the estimate with the Quantity Based Demand System (QBDS) model to completely determine the demand function for different dishwashers. Finally, the elasticity results are compared with the ones calculated using the Linear Almost Ideal Demand System (LA/AIDS). The comparison of the results confirm that the QBDS model is easier to handle and less data demanding than the LA/AIDS model while providing reliable estimates of demand elasticities.

35 p. CO2 prices will continue to differ from one country to another for a long time, even if a global post-Kyoto agreement is achieved in the near future. The non-homogeneous nature of climate policies may decrease the competitiveness of some industries with the risk of relocation of activities due to carbon leakage. One of most exposed industries in Europe is iron and steel, as it is highly CO2-intensive and relatively open to international trade. Most studies estimate a leakage of up to 20% as a consequence of all the industrial production activities that are expected to be relocated, and a level of relocation ranging from 1.5% to 35% specifically for the iron and steel sector. This might seem a relatively small macroeconomic impact if measured at country or EU level. However, the picture may be quite different if the analysis is conducted at sub-national level. Therefore, one could argue that there is an important gap in the literature as the relevant studies are applied to a large geographical scale when the fact is that in Europe this industry is highly concentrated in certain specific regions, i.e. the so-called Old Industrial Regions (OIR). This paper seeks to analyse the impact that different levels of relocation of the iron and steel industry in the OIRs will have as a consequence of climate policy. This is done using an AGE (Applied General Equilibrium) model. The results show that although these effects may be diluted from a national perspective, the impact for incumbent regions may be very large, and may in fact significantly reduce their GDPs. Another important outcome emerges when the costs of CO2 reduction derived from industry relocation and from cost-effective policies are compared. Although relocation of industrial activity (i.e. forced output change) can reduce CO2, the cost is very high compared with other options (e.g. induced input substitution). These results can help national and regional policy makers understand the necessary linkages between their environmental and industrial policies.

4 p. CO2 prices will continue to differ from one country to another even if a global post-Kyoto agreement is achieved. This may decrease the competitiveness of some industries. One of most exposed industries in Europe is iron and steel, as it is highly CO2-intensive and relatively open to international trade. Most studies estimate for this sector a level of relocation ranging from 1.5% to 35%. This might seem a relatively small macroeconomic impact if measured at country or EU level. However, the picture may be quite different if the analysis is conducted at sub-national level. Most of the studies conducted are applied to a large geographical scale when the fact is that in Europe this industry is highly concentrated in certain specific region, i.e.,. the so-called Old Industrial Regions (OIR). This paper seeks to analyze the impact that different levels of relocation of the iron and steel industry have in the OIRs.

31 p. This paper analyses decisions on energy efficiency (EE) investments by small and medium manufacturing enterprises in the U.S. which have received assessment from the Department of Energy (DoE). The results confirm the importance of payback time and investment costs as the main determining factors in deciding whether to invest in energy efficiency. This behaviour is mantained over time. Such investment recommendations are frequently not implemented even though they apparently entail major advantages and give rise to considerable energy savings. The data show results which are compatible with a series of elementary valuation processes (limited by the availability of information), far removed from other, more academically ambitious methods such as Net Present Value (NPV) and the Real Options (RO) method. The paper analyses the impact of the physical situation of firms in line with their geographical locations in different US states, and changes over time from 1984 to 2008, i.e. 25 years of information. Finally, the paper examines the different levels of effectiveness of participating centres in getting firms to decide to make the investments proposed. EE investment decisions are analysed here using Logit models whose parameters are calibrated on the basis of the information held in the Industrial Assessment Centres (IAC) database. The results shed some light on impact assessment and suggest various policies for promoting investment in EE.

28 p. Climate change is one of the greatest challenges facing human kind. Urgent policy action is needed. Climate change policies are mainly being discussed at international level by means of the United Nations Conventions and the Kyoto Protocol. However, the bulk of the impact will be felt at regional and local level. And these levels of governance hold many of the competences for implementing policy actions. Regional governments are important agents and should, therefore, be incorporated into the negotiation rounds so that their voices can be heard. This paper illustrates the important role of regions in climate policies and considers many of the policy instruments being designed and implemented. More than 20 major regions are showcased here. Finally, the case of Basque climate policy is described to shed some light as to what regions could do.

19 p. Climate change is a global problem whose particular characteristics mean that public-sector policy is fundamental in tackling it: a public-sector policy implemented world-wide that requires the co-operation of a large number of very different stakeholders. Innovative instruments are needed that can overcome the difficulties inherent in a global challenge of this magnitude. This paper looks at climate change as an excellent case in point of how knowledge communities can effectively help to spread learning processes and paradigm shifts. A central role in the globalisation of knowledge of this problem over the past few decades has been played by the Intergovernmental Panel on Climate Change (IPCC), which has acted as a knowledge community and a catalyst for the globalisation of learning. It is not the only community that has contributed to providing both the general public and public-sector policy-makers all over the world with a better understanding of the problem of climate change and the options available for tackling it, but it is without doubt one of the most significant.

4 p. This policy briefing summarizes the results of the last United Nations Climate Change summit (COP 15) held in Copenhagen (Denmark) between 7-18 December. The postures taken by the main countries during the summit, the main outcome, and some areas that created certain frustration on the international stageare analysed.