Saturday, October 18, 2008

EU sticks to energy plan despite economic fears

Robert Wielaard, Brussels 
The Age, October 18, 2008

EUROPEAN Union leaders have pledged to stick to a costly plan for deep cuts in greenhouse gas emissions, saying the crisis in global financial markets must not deter efforts to combat climate change.

After presiding over a two-day summit, French President Nicolas Sarkozy said that, despite misgivings about costs, "climate change is so important that we cannot use the financial and economic crisis as a pretext for dropping it".

He had warned leaders of the 27-nation EU they would be held in ridicule if they abandoned their target of creating the world's first low-carbon economy.

In March last year, EU governments pledged to cut emissions by 20%, take 20% of primary energy from renewables and cut consumption by 20% — all by 2020.

But several heads of government, including Italy's Silvio Berlusconi and Poland's Donald Tusk, who were not in office then threatened to refuse to be bound by the targets.

Britain, however, announced it would introduce a legally binding pledge to cut carbon emissions by 80% by 2050, amending soon-to-be approved legislation requiring a 60% cut.

The cuts will cover all industries and, according to the chairman of the Government committee that made the recommendations, would cost around 1-2% of GDP in 2050 and was "challenging but feasible". The summit capped weeks of turmoil as fears of a serious economic slowdown divided EU leaders over greenhouse targets.

When the summit started, Poland and six other Eastern European members issued a surprise demand that the EU drop a December target for agreeing on details of the plan to cut the bloc's greenhouse gas emissions by 20% by 2020. Italy joined them in arguing that the costs of going green, combined with the looming economic downturn, were too much for their industries to bear.

"We want a package that will be tolerable for the poorer member states," Mr Tusk said.

Mr Sarkozy said he would try to forge a fair deal to avoid penalising the bloc's former communist nations that depend largely on coal for their power. Insisting he had achieved unanimity, he said: "The objectives remain unchanged and the calendar remains the same."

European Commission pres ident Jose Manuel Barroso added: "We're not going to let up in the battle against climate change and there's no question of picking between the financial crisis and climate change. The two go together."

Both leaders admitted they had "an awful lot of work" to do to persuade the leaders to agree on details by mid-December.

The EU climate package includes steps to force major polluters such as energy generators, steel makers and cement producers to pay billions into a cap-and-trade emissions program costing nearly $US70 billion ($A101 billion) a year in polluter fees.

The plan is to enact the package in 2009 and draw the United States and other nations into a broad international program.

To help industry at a time of economic slowdown, EU leaders said they would consider a stimulus package. Mr Sarkozy pointed particularly to the automotive industry, which is demanding a $US54.5 billion bail-out fund.

"Can you ask the European car industry to provide clean cars, change the whole industrial apparatus, without giving them a helping hand?" he said.

He said European car makers might need an injection of state cash, similar to the US Government's $US25 billion low-interest credit line for General Motors, Ford and Chrysler announced last month.

No comments: