Eastern Europe feels cheated on carbon quotas

Published: Saturday 15 September 2007

-- (Credit: EU)On August 17, 2007, the government of Lithuania formally decided to take the European Commission to the European Court of Justice over reduced co2 emission allowances (carbon quota) for the next carbon trading period of 2008-2012. With this, it becomes the seventh country from eastern Europe to take legal action against the eu executive.

Earlier, Lithuania's Baltic neighbours and eastern countries Latvia, Estonia, Poland, Hungary, the Czech Republic and Slovakia decided to take action against the commission over carbon quotas, which, they say is too restrictive for their growing economies.

In 2005, the eu set up an emissions trading scheme to reduce greenhouse gas emissions and comply with the Kyoto protocol. In the first phase of trading--from 2005 to 2007--the eu handed out too many carbon quotas to countries.Down to Earth This led to carbon price crash and rendered the system ineffective in terms of creating an incentive to reduce emissions. This also underlined the need for tougher limits during the second phase of carbon trading.

Last year the commission asked each country to submit a national allocation plan, providing an estimate of the total carbon emissions of all their industries.

Lithuania asked for a carbon quota of 16.6 million tonnes a year. The Lithuanian government said after the closure of its Soviet-built nuclear reactor, it needs to generate power from fossil fuels, a major source of carbon emissions, to meet its power demands. But the commission, allege Lithuanian officials, ignored the country's plea. It was granted only 8.8 million tonnes of carbon quota.

Lithuania now wants a quota of 11.2 million tonnes. Its neighbour Latvia voices a similar complaint, as its electricity supply also comes from the same power plant. It had asked for a quota of 6.25 million tonnes, but was allocated just 3.43 million tonnes. These younger members of the eu feel their demands are often cut significantly in comparison with the allowances of older members (see table: New comer's tax). The countries have protested the commission's measures in fixing allowances, and raised questions of equity in relation to European policy on climate change.

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