Call to restrict emission trade

Date: 04/03/1999

By Renée Cordes

EU ENVIRONMENT ministers will call next week for restrictions on the amount of carbon dioxide emission 'credits' that member states can buy to meet their reduction targets.

The German presidency, supported by Austria and Denmark, will press ministers to set a 50% ceiling on credits. The move is aimed at ensuring countries meet the bulk of the targets agreed at the 1997 Kyoto conference on climate change by reducing their emissions at home rather than by buying credits from countries which produce lower levels of emissions than permitted under the accord.

EU member states are obliged under the Kyoto agreement to cut emissions of six greenhouse gases, including carbon dioxide, to 8% below 1990 levels by 2012 at the latest.

While US officials are arguing in favour of a flexible mechanism which would allow as much trading as possible, EU officials are sticking to their demand for a ceiling on the practice.

"We should not buy from others what we ought to do ourselves," said an aide to Environment Commissioner Ritt Bjerregaard, adding that it was important "to show the developing world that we are serious when we talk about reducing our own emissions".

While most environment ministers look set to support calls for ceilings, overcoming opposition from the UK and some southern member states, they may postpone discussions on an exact figure until their next meeting in June.

EU diplomats warn that it will be difficult to agree a ceiling on emissions trading until it is clear whether member states or private industry would be tasked with agreeing such deals. They will also have to clarify such issues as whether the agreed limit would apply to a company's affiliate in another country or just at home.

European industry is opposed to setting mandatory ceilings and argues that voluntary agreements would be more cost-effective. "When you put ceilings on emissions trading, this also means you apply restrictions to the flexibility implemented in the system. Lower flexibility is also synonymous with higher costs," said Claude Culem, head of energy policy at the European Chemical Industry Council (CEFIC).

But non-governmental organisations fear countries may shy away introducing the tough measures necessary to cut emissions if they are allowed to buy credits from abroad.