Europe’s lead on climate change – is it too much or too little?

The European Union’s Climate Action Plan announcement last week has created division amongst member countries. The plan, which calls for country-specific greenhouse gas emission cuts based on gross domestic product (GDP) and renewable energy increases, have left many EU member countries feeling unfairly burdened and threatened by economic hardships.

The plan calls for reducing GHG emissions by 20% by 2020 compared to 1990 levels, increasing the use of renewable energies in Europe to 20%, and requiring that biofuels must account for 10% of all fuels used for transport. The plan would also require power generators to pay for permits to emit carbon dioxide starting in 2013.

'Responding to the challenge of climate change is the ultimate political test for our generation,' says EU President Jose Manuel Barroso. 'Our package not only responds to this challenge, but holds the right answer to the challenge of energy security and is an opportunity that should create thousands of new businesses and millions of jobs,' he added.

Environmentalists and business have responded favourably to the renewable energy requirements and the changes to the carbon emissions trading scheme which requires polluters to pay for pollution permits. Currently the permits are given out for free, which industry in turn can sell at market price to consumers, creating windfall profits without curbing GHG emissions.

But environmentalists have rejected the EU’s plan to get 10% of road fuels from agricultural sources as unworkable and unsustainable, noting the vast swathes of rain forest that have already been cut down to make way for the production of biofuels.

'The EU target for biofuels is a mistake. Biomass is more efficiently used for electricity and heat production, rather than to fuel high-consumption cars,' said Greenpeace renewable energy campaigner Frauke Thies.

In December 2007, at the Bali Conference on Climate Change, European emission reduction targets for 2020 were established at 25-40 percent below 1990 levels. The EU target to reduce GHG emissions by 20% by 2020 falls short of that target.

'The promising parts of this energy package are overshadowed by a greenhouse gas target that falls well short of what is needed,' said Friends of the Earth campaigner Sonja Meister. 'Reducing greenhouse gases by only 20 per cent is simply not enough. The EU must live up to the agreements made in Bali.'

'One would say that maybe what has come out is not up to expectations,' said Rajendra Pachauri, chairman of the UN Intergovernmental Panel on Climate Change (IPCC).

Overall the reaction has been divided amongst EU member countries.

According to the plan, Sweden, which has the highest share of renewable energy supply of EU members of 40%, must increase that number to 49% and reduce GHG emissions by 17%.

'The government needs to negotiate down the Swedish targets... we have not been given credit for the work we’ve already done,' said Urban Backstrom, chief executive of the Confederation of Swedish Enterprise.

Irish Prime Minister Bertie Ahern was supportive of the proposals. In a statement, he said: 'The approach signaled by the commission raises very serious economic and social issues for Ireland, and requires very careful consideration.'

Sources in Dublin did note that the proposed 16% target for final renewable energy consumption was 'broadly in line' with Ireland’s own aims.

Germany Economy Minister Michael Glos fears jobs could be at risk from the 14% target to cut CO2. Under the plan Germany is also required to increase its share of renewable energy from 5.8% to 18%, one of the steepest requirements of any EU nation.

'We really don’t need this plan to reduce carbon dioxide emissions, it will destroy jobs in industries which consume a lot of energy,' he said. 'We don’t want the European Commission to dictate the rules to us.'

It is widely believed that without major emitters, such as India, China and the U.S. falling into line, many European economies will be damaged and less competitive in the global marketplace as a result of the new plan. Despite having reduced emission targets, many European countries feel the fast approaching plan is overwhelming without a global treaty and successor to Kyoto in place.

Energy-intensive sectors such as the steel, aluminum and chemical industries have accepted the principles of the plan but voiced similar concerns as Germany about the cost and impact on jobs and a drop in competitiveness. The steel industry is expecting the shift to entail the loss of up to 300,000 jobs across Europe

Some companies also fear that the stringent emission targets will force them to move production outside the bloc, further strengthening the competitiveness of China and India, which so far have no emission limits.

EU Environment Commissioner Stavros Dimas has said that if competitors from the US and China have still failed to establish climate rules by 2011, thereby allowing for cheap production, he would consider lightening the burden for European companies and forcing importers to buy emissions permits.

The EU executive has confirmed that it will not decide on the introduction of any such measures before 2011. However placing climate related trade sanctions aimed at putting EU and third country producers on a level footing appears mainly targeted at convincing governments in Washington and Beijing to adhere to a global deal on climate change.

The US has stated it would resist any move to introduce a tax on American products based on its position in climate change negotiations. US Trade Representative Susan Schwab accused the EU of using the climate as an excuse for protectionism.

Despite the global resistance to taxing imports to Europe, the EU believes its plan is the correct course of action in the absence of an international agreement.

'An international agreement is our absolute priority,' Barroso said. 'But let me be clear, if we do not make progress we will protect European companies.'

The EU Commission insists that the countries would pay a far higher price for ignoring the environment. Measures to mitigate climate change would cost consumers 3 euros ($4.37) a week on average, 'the cost of inaction is up to 10 times more than what we are proposing,' said Barroso.

Climate Change and Energy will be a key focus at the 10th Biennial GLOBE Conference and Trade Fair on Business and the Environment this March. The sessions will discuss GHG emission trading systems, climate change policy among other topics and will feature expert speakers on the subject from around the world. More information can be found on the GLOBE 2008 website.

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