Commission looks to spread pain of cutting EU emissions

The European Commission unveiled yesterday (23 January) a package of measures to tackle climate change, warning that the cost of delay would be much higher than the price of taking up its proposals.

José Manuel Barroso, the Commission president, said: "Climate change is one of the most important challenges of the 21st century…it’s true there are some costs, but we have to compare the cost of this package with the cost of inaction." The Commission believes that its package will cost less than 0.5% of gross domestic product by 2020, or around €3 a week per citizen.

European leaders agreed last March to cut carbon emissions by 20% by 2020, with a pledge to make cuts of 30% if other countries joined in. They also signed up to a commitment that renewables should provide one-fifth of the EU’s energy needs by 2020. Yesterday’s package is a roadmap for how to get to these headline-grabbing 2020 numbers, but is contested by business and greens.

At the heart of the package are individual targets for each member state on cutting emissions. Wealthier member states are expected to make the deepest cuts in their emissions, while new member states will be allowed to continue increasing their emissions compared to 2005 levels. There are also individual targets on renewable energy, adjusted for wealth and existing efforts. Under the Commission’s proposals, Sweden would have to derive almost half of its energy (49%) from renewable sources by 2020; Latvia, Finland and Austria are also expected to make heavy use of renewables.

One of the most controversial aspects of the package is how to meet the target of getting 10% of transport fuels from biofuels by 2020. Barroso said that the Commission had produced "the most important and the most advanced sustainability criteria for biofuels", but green groups and MEPs called for a re-think on the target.

Proposals to reform the Emissions Trading Scheme (ETS) are also disputed. The Commission wants power companies to pay for permits to pollute once the reforms take effect after 2013. Some energy-intensive industries will get a proportion of free permits until 2020, although a precise list of industries was not specified. BusinessEurope, the main employers’ federation, said that it was "not satisfactory" that the conditions for free allowances would be left uncertain until 2010, when the Commission reviews the ETS.

The Commission hopes to see the package adopted by the first half of 2009 at the latest, before the end of the European Parliament’s term. The aim is to get agreement ahead of a crucial UN climate change conference in Copenhagen in 2009, when countries are expected to thrash out a deal on cutting global carbon emissions from 2013. The new rules on environment and state aid, for which the Commission does not need the approval of the Parliament or member states, will come into force next month.

What is in the energy package?

• Burden-sharing (‘effort-sharing’) proposals for cutting CO2

• Renewables directive

• Review of the emissions trading scheme (ETS)

• Proposals on carbon capture and storage (CCS) and clean coal

• New rules on state aid and the environment

The European Commission unveiled yesterday (23 January) a package of measures to tackle climate change, warning that the cost of delay would be much higher than the price of taking up its proposals.