Businesses say voluntary ‘green’ deals are best

Date: 29/10/1998

EUROPEAN companies insist that they can play their part in tackling the problem of global warming without having burdensome legislation imposed upon them.

At a workshop in Brussels attended by some of the Union's leading industry lobby groups earlier this month, the message was clear: the best way for governments and firms to deal with the problem of greenhouse gas emissions is by drawing up voluntary agreements.

European employers' federation UNICE argues that a combination of such pacts and the imaginative use of practices such as 'emissions trading' should eliminate the need for the European Commission to propose any new laws to tackle the problem.

According to the organisation's climate change expert Klaus Kohlhase, the Kyoto deal “should remove any need to further regulate or tax European industry's greenhouse gas emissions”.

Kohlhase argues that EU decision-makers should consider voluntary agreements with industry as a key element of efforts to meet their Kyoto commitments rather than as just an afterthought.

“My plea to policy-makers and governments is 'please understand that agreements are important and make them an integral part of reaching the targets of the Kyoto Protocol',” he said.

It is not only UNICE which is stressing the importance of voluntary agreements. Groups representing specific industrial sectors and individual companies are all singing the same song.

CEFIC, which acts on behalf of the European chemical industry, also wants its members to have the opportunity to draw up accords with national governments. The organisation's spokesman Francesco Balocco argues that the recent deal between European carmakers' lobby ACEA and the Commission on reductions in carbon dioxide (CO2) emissions from new cars is a good model for future agreements.

Earlier this year, ACEA pledged to reduce CO2 emissions from all new cars built after 2008 by an average of 25&percent;. After the Commission said it was in favour of the offer, the ACEA deal was formally accepted by EU environment ministers at their meeting in Luxembourg earlier this month.

The Commission argues that this accord alone will allow the Union to meet 15&percent; of its Kyoto greenhouse gas reduction target. In total, the EU has pledged to cut its emissions of CO2 and five other gases to 8&percent; below 1990 levels by 2012.

Several of the Union's leading oil companies have also made unilateral commitments to reduce their greenhouse gas emissions.

At the end of September, British oil giant BP announced that it intended to cut its production of greenhouse gases to 10&percent; below 1990 levels by 2010. Part of the reduction will be achieved by an emissions trading scheme which will be set up between 12 BP businesses around the world.

In the middle of this month, Anglo-Dutch petrochemicals company Royal Dutch/Shell followed its rival's lead, pledging a similar 10&percent; cut to be implemented by 2002, and France's Elf Aquitaine has said it will achieve a 15&percent; cut by 2010.

But not all companies regard Kyoto simply as a burden to be borne in the most painless manner possible. For the Union's small but growing alternative energy sector, the deal represents an investment opportunity.

Cogen, which represents many eco-friendly combined heat and power companies, is looking forward to expanding its business in the near future.

However, it is also concerned that if too much emphasis is placed on the use of flexible mechanisms such as emissions trading for meeting the Kyoto targets, there will be little incentive for people to switch to the sorts of alternative power sources its members offer.

“Until agreement is reached on their final design, it is not clear whether these processes will help or hinder cogeneration and other small generators such as renewable energy,” it said in a recent statement.

Whether industry's calls for a purely voluntary approach to meeting Europe's commitments will be heeded remains to be seen, however.

The Commission has already indicated that it feels legislation in some areas will almost certainly be required if the Union is to abide by the terms of the Kyoto deal.