EU still determined on climate change in run-up to Milan talks

By Karen Carstens

Date: 27/11/03

RUSSIA is reluctant to ratify it and the Bush administration will not touch it with a ten-metre pole, but the EU remains as committed to the Kyoto Protocol as the Pope to abstinence.

A strong sense of moral obligation towards future generations has driven the EU's policy line on the international climate-change treaty.

Sticking to its guns is also about saving face, however, amid mounting calls from critics for a reassessment of Kyoto's "fatal flaws", just as the next round of annual global talks on the accord is about to get under way.

Moreover, as one of its staunchest defenders, Environment Commissioner Margot Wallström, recently commented: "If it wants to remain credible internationally, the EU must achieve the majority of its climate change mechanisms at home."

Speaking in Brussels last week, the Swede hailed the EU's emissions trading scheme as "the centrepiece in our cost-effective policy mix".

From 1 January 2005, companies in the power, iron, steel, glass, cement, ceramic, pulp and paper industries must have "emission rights" or "carbon permits" to cover their annual carbon dioxide emissions. The scheme allows companies that cut emissions by more than they initially pledged to sell them on as "credits" to firms unable to meet their required reductions.

By March 2004, each member state must submit plans to the European Commission showing how they will comply with the directive; in the meantime, the Commission will publish guidelines in the next month on putting it into practice.

Meanwhile, Wallström is due to attend the ninth meeting of the Conference of the Parties' (COP9) on climate change in Milan (1-12 December) to announce new funding initiatives to promote renewable energy. European Investment Bank (EIB) President Phillipe Maystadt will also be there to explain how his bank can help get such schemes off the ground.

After the EU failed to get the binding global targets it wanted at last year's World Summit on Sustainable Development in Johannesburg, it spearheaded a pledge made by more than 80 nations to promote renewables. (A related European renewables conference in Berlin in February will be followed by an International Conference for Renewable Energies next June in Bonn.)

The United Nations' 1992 Framework Convention on Climate Change, or UNFCC, forms the basis for the Kyoto Protocol, adopted in December 1997 by COP3. After the US rejected it, Kyoto was salvaged at the landmark COP6 Part II meeting at Bonn in July 2001.

COP9 will address outstanding issues such as how to handle the "Clean Development Mechanism" (CDM), which allows industrialized countries to earn "emissions credits" in return for investing in emission-reducing projects in developing countries.

Kyoto required industrialized countries to cut their emissions of six greenhouse gases by an average of 5.2% below 1990 levels before 2012, although Bonn reduced that figure to around 2%. The EU got halfway towards its own target of 8% by the end of the 1990s.

Kyoto will enter into force once ratified by 55 countries accounting for 55% of CO2 emissions in the industrialized world. Canada and Japan have signed up, but Australia has rejected the Protocol and Russia has been dragging its feet.

Comments by Russian President Vladimir Putin, that a rise in temperature could not hurt the country's cold climate, did not go down well in Brussels, but EU diplomats remain convinced Russia will ratify, after which the treaty would finally enter into force.

Russia, which along with Ukraine got a "sweetheart deal" at Kyoto with light targets, was initially hoping for a multi-billion-dollar windfall from selling surplus emission credits, mostly to the world's biggest emitter - the United States.

But Kremlin officials such as Andrei Illarionov, the presidential economic advisor, claim that ratifying Kyoto would mean "dooming the country to poverty, backwardness and weakness".

Critics claim Kyoto is dead - and should be, because it makes no economic sense. "Even if implemented by all industrial countries, Kyoto would have no discernable effect on climate change," claims Marlo Lewis, a senior fellow at the Washington-based Competitive Enterprise Institute. "Kyoto is essentially a predatory trade strategy masquerading as an environmental treaty."

Kyoto would impose greater burdens on the US than on the UK, France and Germany, helped out by a switch from coal to natural gas, reliance on nuclear power and the closure of obsolete east German factories. Others question the science behind Kyoto, slamming the UN's Intergovernmental Panel on Climate Change (IPCC) for publishing dubious predictions and a flawed peer-review process.

Kyoto's supporters, however, point out that critics can say whatever they like without any kind of "peer review".

"[The IPCC] is a relatively transparent process, but it's huge," said one analyst.

"It's a bit like the EU: everything is available, but it's difficult to understand what's happening."

"Obviously," he added, "there is a bias towards pro-climate-change research - you don't go into climate change if you don't think there's a problem."

Most scientists - and governments, including the US - agree that there is a real climate-change problem, and that it is at least partially man-made. But it is difficult to quantify Kyoto's potential costs and benefits: the US government has estimated it would cost America &036;400 billion annually, while some Commission projections predict huge net benefits in sectors ranging from agriculture to health.

But the transatlantic clash of mindsets is not always so stark. Several US states, including New York and California, have crafted their own climate-change strategies.

"This is the way climate policy has historically been done in the US," explained Christian Egenhofer, a senior fellow at the Brussels-based Centre for European Policy Studies.

Yet if Russia fails to ratify, the EU will need to fine-tune its own approach.

"The EU [emissions trading] system is sound but it will not continue forever if there is no international reaction," cautioned Egenhofer, giving it until around 2008 before a rethink is needed.

The "envirocrats" some love to hate will surely find a way.

Belgium's former environment minister Olivier Deleuze, the EU's chief climate negotiator in July 2001, perhaps best summed up Europe's climate change attitude: "I prefer an imperfect agreement which is living to a perfect agreement that doesn't exist."

Major preview analysis;

http://unfccc.int/cop9/index.html http://unfccc.int/cop9/index.html

http://unfccc.int/ http://unfccc.int/2860.php

---