Tough tests ahead for climate change plans

Europe's controversial climate change plans face a tough test in the face of financial meltdown.

MEPs are voting on pollution reduction targets proposed before the current economic crisis hit. Now some governments are pleading on behalf of key industries that the CO2 emissions cuts will be too tough on top of the impact on business of the market turmoil.

On the table are plans for an EU commitment to cut greenhouse gases by 20 per cent by 2020 – and by 30 per cent if the rest of the developed world signs an international agreement to do the same.

The European Parliament's Environment Committee is expected to endorse the target after weeks of argument between MEPs backing tough green standards and those urging diluted targets in the face of severe economic uncertainty.

The Committee will also pass judgment on plans to step up Europe's Emissions Trading Scheme which caps overall CO2 emissions and gives industries limited annual emissions allowances.

EU governments agreed 18 months ago to set tough emissions targets, as well as aiming to get at least one-fifth of Europe's total energy needs from renewable sources by 2020.

The Emissions Trading Scheme, due to be extended from heavy industry to include aircraft emissions in future, is at the heart of a strategy designed to put the EU at the forefront of the global climate change response in time for a green summit in Copenhagen next year.

But even within the European Commission, the financial meltdown has sharpened divisions over the plan, particularly between Industry Commissioner Günter Verheugen and Environment Commissioner Stavros Dimas.

Verheugen wants to ease the financial burden on industrial sectors facing payment for emissions trading permits, and the costs of new technology to cut CO2 output.

Dimas argues that climate change is permanent – but the financial crisis is temporary and should not be allowed to hijack Europe's environmental ambitions.

MEPs are drawn up along similar lines, but Labour's climate change spokeswoman in the European Parliament Linda McAvan said strict limits on emissions must remain, with industry paying for emissions trading permits rather than being given them for nothing, as Verheugen wants.

"An Emissions Trading Scheme that provides economic incentives for the most heavily polluting industries to cut emissions is key in the fight against climate change." said McAvan. "I want industry to have to buy 'allowances to pollute' rather than get them for free."

Liberal Democrat MEP Chris Davies, whose report calling for major spending on carbon capture and storage (CCS) is among green dossiers being voted accused governments of breaking a promise to promote CCS demonstration projects.

"Eighteen months after prime ministers made their pledge there is nothing to show for it. No projects have been approved, no funding support mechanism has been put in place, and there is nothing on the table.

"We (MEPs) have the chance to make a real difference and turn CCS into commercial reality. In the fight against climate change it could be one of the most important votes ever taken."

But the issue faces months of debate yet - not least negotiations between EU ministers whose views on green Europe are increasingly at the mercy of the financial markets.

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