Debate on emissions cuts heats up

Date: 13/05/1999

As EU governments take faltering steps towards agreeing a common strategy for meeting the climate change pledges made by the Union at Kyoto, Simon Coss examines why it is proving so difficult to match rhetoric with concrete action

THE thing about making promises is that people expect you to keep them. Yet when it comes to the question of fighting global warming, it appears that the Union's 15 national governments are only just beginning to wake up to that fact.

Later this month, EU environmental experts will take part in international talks in Bonn designed to put some flesh on the bones of the United Nations-sponsored deal to cut greenhouse gas emissions hammered out in Kyoto, Japan in December 1997.

But there is a problem. While the Union pledged at Kyoto to reduce its emissions of carbon dioxide and five other greenhouse gases to 8&percent; below 1990 levels by 2012 at the latest, it did not say how that target would be met.

Since Kyoto, that debate has become increasingly bitter.

Environment ministers meeting informally in Germany last weekend appeared to take a faltering step forward when they reached a provisional compromise on how to use some of Kyoto's more controversial policy options. But the Union will still find it hard to present a united front in Bonn.

Many observers simply cannot understand why Kyoto is proving such a problem for EU governments, especially as the reductions target the Union must now meet is considerably lower than the 15&percent; cut the EU said it was prepared to make before the talks in Japan.

The 8&percent; reduction was established after almost a week of intense negotiations which effectively pitted 'the rest of the world' against the US. Washington held out until the last moment against making any significant cuts at all.

But even though the Union appeared to leave Kyoto facing a less daunting challenge than it had anticipated, negotiations between its member states over exactly how the overall 8&percent; cut should be achieved have so far proved particularly bitter.

The first big argument came over the question of 'burden sharing': the thorny issue of which countries should make what reductions in order to meet the EU's overall target.

Before Kyoto, Union governments had agreed on a provisional burden-sharing deal which would have enabled the Union to achieve its original goal of a 15&percent; cut in greenhouse gases. The complex formula arrived at called on some member states (notably the UK, Germany and the Netherlands) to reduce their emissions by up to 20&percent; while allowing those at the other end of the spectrum, the Union's poorer southern countries and Sweden, to actually increase their production of greenhouse gases.

In the case of the southern member states, it was argued that greenhouse gases were an unavoidable side effect of much-needed industrial development, while the Swedes were treated as a special case because they were in the process of replacing their nuclear power plants with CO2 emitting coal-fired stations.

Once the Kyoto deal was struck, however, those countries which had been selected to make the largest reductions argued that as the talks in Japan had produced a new overall target for the EU, a fresh burden-sharing deal should be drawn up.

The basic aim of this group of 'revisionist' EU member states, of which the Netherlands was by far the most vocal participant, was to ensure that their national targets were reduced while those countries which had got off lightly under the original deal would have to make a greater contribution.

The burden-share row was eventually resolved at an extremely bad-tempered all-night meeting of environment ministers in Luxembourg last June. The new agreement followed the basic pattern of the original deal, but the toughest national targets were lowered and less generous margins were granted to countries permitted to increase greenhouse gas production.

However, the burden-sharing deal by no means marked the final act in the climate change saga. While the agreement finally settled the issue of what emissions cuts each country would make, the far more complex question of how those targets should be met remained unanswered.

At the heart of the current disagreements are a series of controversial policy options agreed in Kyoto which come under the joint heading of 'flexible mechanisms': 'flex-mex' to environmental aficionados.

These measures (most of them purely theoretical at the moment) were championed by Washington at the Kyoto talks. They would allow industrialised nations to meet a large percentage of their greenhouse gas reduction targets without the need for unpopular measures such as energy taxes.

The most hotly disputed of the flexible mechanisms is undoubtedly the concept of 'emissions trading'. Under this as-yet untested system, a global market in emissions 'credits' would be set up. Every country in the world would get a number of these credits corresponding to the level of greenhouse gas reductions it was obliged to make under the Kyoto deal.

If a country managed to reach its target with credits to spare, as could well be the case for a nation in industrial decline such as Russia, then it could sell the remainder of its credits to the highest bidder.

The country buying the credits could then offset them against its Kyoto target, thus reducing the need for new environmental policies at home. It is this which has prompted critics to describe emissions trading as 'buying the right to pollute'.

ANOTHER of the contested flex-mex initiatives is the so-called 'clean development mechanism'. This is also based on the principle of a market in emissions credits and means that industrialised nations would be permitted to reduce their national emissions targets if they sponsored environmentally friendly projects in the developing world.

Opponents of flexible mechanisms say that they would hold back economic development in the world's poorer countries while stopping those responsible for the problem of global warming - industrialised states - from cleaning up their act at home.

At last November's meeting in Buenos Aires to follow up on the Kyoto talks, negotiators agreed to give themselves until 2000 to decide exactly how flex-mex should be used.

The EU team, led by Acting Environment Commissioner Ritt Bjerregaard, argued strongly that the disputed policy options should only be used to supplement domestic action. Bjerregaard insisted that national governments should ensure that the majority of greenhouse gas reductions were met through changing policies at home.

Immediately after Kyoto, this idea of a 'concrete ceiling' on the use of flexible mechanisms seemed to have the support of all EU governments. But it was not long before cracks began to appear in this apparently unified facade.

By the new year, several member states were already suggesting that imposing a cap on their right to use flexible mechanisms could prove economically damaging, as global competitors would not necessarily face the same constraints.

The argument came to a head in March when the German presidency tried - and failed - to broker a compromise on the issue at the quarterly meeting of EU environment ministers.

Despite Berlin's best efforts, a number of members states led by the Netherlands and Sweden resisted all attempts to impose limits on the use of flexible mechanisms.

The deadlock appears to have been broken at last weekend's informal talks, although the Netherlands still insists that it must check whether the provisional deal is compatible with national legislation.

If the EU is unable to maintain a united front on flex-mex, then its bargaining position will be considerably weakened when Kyoto signatories meet for ministerial talks in Bonn this autumn.