Bloomberg BusinessWeek, January 17, 2010
By Jonathan Stearns
(Bloomberg) - European nations are struggling to hold a common line on climate policy after last month’s failed United Nations summit in Copenhagen, with the U.K., Germany and France defending deeper emission cuts in the face of Italian and Polish resistance.
Differences between the European Union countries are emerging after the UN failed to set binding worldwide targets to curb the air pollution blamed for climate change. The U.S. and China, the biggest emitters of greenhouse gases, resisted EU demands for such an agreement at the Copenhagen summit.
The outcome leaves the 27-nation EU, which caps emissions by power plants and factories, in need of a new global strategy. The EU is already set to cut greenhouse gases by 20 percent in 2020 compared with 1990 and had pledged to raise that to 30 percent if other wealthy economies follow.
“We should maintain the 30 percent offer,” U.K. Energy and Climate Change Secretary Ed Miliband told reporters at an EU environment meeting yesterday in the Spanish city of Seville. “It’s very, very important. It has always been a conditional offer.”
Europe has led the campaign for a global treaty to tackle the heatwaves, storms and floods tied to climate change, saying rich countries must cut greenhouse gases such as carbon dioxide by 2020 and the developing world should limit emissions growth by then. After Copenhagen, UN members face a Jan. 31 deadline to submit their emission pledges.
Reduction Targets
The offers by developed countries in Copenhagen would trim their discharges by 13 percent on average in 2020 from 1990 levels, says the European Commission. That’s insufficient to justify a deeper European reduction target of 30 percent, according to the commission, the EU’s regulatory arm, whose environment chief warned of tough negotiations ahead.
“It’s going to be difficult,” said EU Environment Commissioner Stavros Dimas. He said the aim is to get a binding global agreement at a UN meeting scheduled to take place in Mexico at the end of the year.
The European 20 percent reduction goal is underpinned by recent legislation that tightens CO2 caps on energy and manufacturing companies in Europe’s emissions-trading system and that requires each EU nation to limit discharges from industries outside the program.
Emissions Trading Program
Any EU move to a 30 percent cut would involve a further tightening of curbs in the emissions-trading program, the world’s biggest greenhouse-gas market. Current EU rules will lower the annual cap on the 11,000 installations now in the trading system by 11 percent on average over the period 2013 to 2020 compared with 2008 to 2012.
Europe’s goal is to make fossil-fuel use more costly and make the European emissions-trading system the cornerstone of a global market. Dimas said a deeper EU reduction target would bolster EU CO2 allowance prices, which he said were currently too low to provide a “sufficient incentive” to switch to low- emission energy technologies.
German Environment Minister Norbert Roettgen said the EU should seek a 30 percent emissions cut by pressing the U.S., China and other countries to do more.
“We need to push the others,” Roettgen said. “We can’t fall back. We’re ready to go from 20 percent to 30 percent if the others come along.”
France is pressing the EU to consider tariffs on imports of manufactured goods from countries with weaker climate-protection rules as a way to protect European industry from unfair competition. Northern member states are more skeptical about any trade “mechanism” that would include the price of CO2 in imported goods.
“It’s not forbidden to look at whether the 30 percent target requires a carbon-inclusion mechanism to protect the European industry,” said French Environment Minister Jean-Louis Borloo.