Service on Climate Change (Dec08/02)
Blow to EU climate policy as big concessions made to industry
The companies are asked to cap their emissions at specified levels and those exceeding these were supposed to pay for carbon emission permits (whose prices would be determined through auctions) under the original scheme.
The EU Summit made concessions to industries exposed to international competition as well as to those not exposed. Heavy industrial sectors like steel and chemicals are to get free permits if they can show increasing costs and that they are significantly exposed to global competition.
But companies not exposed to such competition also get a concession. They will have to pay for permits from 2012, starting with 20%, then increasing. However, they have to pay for only 70% of their permits by 2020, instead of 100% as in the original EC plan.
A report in the Financial Times (13 December) stated that about 90% of European manufacturers will qualify for the free permits, according to a senior EC official. Revenues from the EU auctions, once forecast to be Euro50 billion a year by 2020, are now expected to be Euro30 billion.
European environment and development groups (Friends of the Earth Europe,
Greenpeace, Oxfam International, Climate Action Network Europe and WWF)
in a joint statement condemned the
They said: "This is a dark day for European climate policy. European heads of state and government have reneged on their promises and turned their backs on global efforts to fight climate change.
"They have chosen the private profits of polluting industry over the will of European citizens, the future of their children and the plight of millions of people around the world."
the EU Summit agreed that the EU would stick to its pledge to reduce
its emissions by 20% by 2020, the groups estimated that the
high rhetoric in
The NGOs described the EU's deal on the Effort Sharing law (which sets national emission targets for sectors not included in the EU's emissions trading) as inconsistent with the EU's target of keeping global warming below 2 degrees Celsius.
The EU leaders also made only a weak and ambiguous commitment to the 30% reduction in EU emissions by 2020 they had trumpeted just last year, said the groups.
"Furthermore, the agreement would mean that unacceptably high levels - around two thirds - of these reductions could be met by buying carbon credits from projects outside of EU borders," they added. "EU leaders also refused to introduce measures, such as fines, to compel countries to meet their national targets - a fundamental flaw, which could prompt governments to think that they can get away with inaction."
The groups called on the European Parliament to reject the EU leaders' deal.
"In discussions over the future of the EU Emissions Trading Scheme (ETS), practically full exemptions from requirements to buy carbon permits were agreed for the European manufacturing sector," said the NGOs.
"This was in the absence of any strong evidence that such a requirement would impact on the international competitiveness of these industries. Following mainly Polish efforts, even the polluting power sector was awarded exemptions from having to pay for such permits in auctions, in spite of the huge windfall profits it has reaped by passing on the costs of permits it has so far received for free to customers."
NGOs insisted that auctioning must become the norm for all industries
covered by the ETS when the system comes up for review. Industries must
pay if they don't reduce their pollution and the revenues generated
used to fund tackling climate change in developing countries and in
EU also abjectly failed to make binding commitments to provide funds
to help developing countries to adapt to the unavoidable impacts of
climate change, and to reduce the growth in their emissions - a move
which has threatened the collapse of the ongoing UN climate negotiations
They demanded that "EU leaders immediately resume talks on financial commitments to developing countries and produce an adequate, binding proposal by March 2009. UN climate talks urgently need the EU to show it is willing to pay its fair share of the costs of tackling climate change." +