Cloud over EU's climate plan

Published: Saturday 15 November 2008

Italy, Poland raise fear of economic slowdown

EUROPE's ambitious climate package was jeopardized after some countries, led by Italy and Poland, said the goals were too expensive to implement in times of global economic slowdown.

A watered-down climate package can weaken the European Union's (eu's) ability to negotiate an international climate agreement post-2012, when the first period of the Kyoto Protocol ends. While leaders at the European summit, held in Brussels on October 15-16, agreed to the broad aims of the package, they are yet to work out the details.

In January 2007, the European Commission presented an energy and climate change package, including the proposal to cut greenhouse gas emissions by 20 per cent from the 1990 levels by the year 2020 (see box). The package, expected to be finalized by December, has gone through much deliberation since. On October 7, the European Parliament voted to support most of the proposals in the package.

There were, however, voices of dissent, which have grown louder in recent weeks. At the Brussels summit, Italy said that adoption of the climate proposals could further weaken its economy. Poland, which generates most of its electricity using coal, and seven other East European countries called for a gradual implementation of the climate package. These countries said their industries would find it more difficult to pay for emission permits than their counterparts in richer European states.

In 2005, Europe had introduced an emission trading scheme to buy and sell greenhouse gas emissions. Industries were issued permits for the amount of greenhouse gases they emitted beyond permissible limits. These permits are being doled out free till 2012. The climate package attempts to change this by phasing out the free permits. Power companies will have to purchase all emission permits after 2013. Manufacturing units will have to obtain 15 per cent permits in 2013, and all by 2020.

Germany, the biggest polluter in eu, wanted more free emission permits for its industry. The eight East European countries argued that having to pay for their coal usage would force them to be dependent on natural gas from Russia. Poland is trying to rope in other countries to stall the climate package from becoming law.

France, which holds the European Parliament's presidential post, wants the package finalized before its term ends in December.

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