Eastern EU states unite for overhaul of CO2 curbs

Reuters , Friday July 4 2008
By Pete Harrison

PARIS, July 4 (Reuters) - The European Union geared up on Friday for deep cuts in greenhouse gases as eight ex-communist states sought help in overhauling their infrastructure for a low-carbon future.
France, which took over the EU's rotating presidency this week, has made climate change its top priority and hosted a meeting on the outskirts of Paris to identify the main areas of disagreement.
Environment ministers said the main concerns were how to protect industry from rivals in other countries with less strict environmental standards, as well as a growing rift between east and western Europe over the mechanism for curbing emissions.
The EU plans to cut carbon dioxide emissions by a fifth by 2020 compared to 1990 levels.
The goal would be raised to 30 percent in the event of an international climate accord, which many of the ministers now see as probable with both U.S. presidential candidates focused on climate change.
"We will now prepare ourselves for the 30 percent in the EU," Swedish Environment Minister Andreas Carlgren told reporters.
His French counterpart Jean-Louis Borloo agreed, saying: "All the countries want more, faster and stronger."
But eastern European states said curbs on carbon dioxide would push up power prices and stunt economic growth, with Poland and seven eastern states led by Hungary joining forces in a call for help.
SOLIDARITY
Warsaw says EU plans to make power generators buy all their permits to produce carbon dioxide at auction from 2013 would increase electricity prices by up to 70 percent, which would be politically unsustainable.
Poland's environment minister, Maciej Nowicki, told Reuters Warsaw wanted auctioning of permits for the power sector to emit carbon dioxide phased in from a starting level of 20 percent in 2013, increasing by 10 percent a year.
He said he had presented a joint position with Hungary, Slovakia, Romania, Bulgaria, Latvia, Lithuania and Estonia to take account of the specific problems of fast-growing former communist economies with carbon-intensive energy sectors.
But European Environment Commissioner Stavros Dimas said Poland had overstated the costs.
"We do not agree with their calculations," he told Reuters. "There could be a 10-15 percent increase, and this is over a period of time."
Nowicki said increased costs of heating Polish homes might force people into burning cheap, highly polluting coal.
"Then we would have smog, problems with air pollution and even more CO2," he said.
Hungarian environment official Tibor Farago called on richer EU states to show solidarity and help eastern countries deal with the high initial costs of reducing their dependence on coal ahead of global climate talks in Poznan, Poland in December.
"Neither Hungary nor any other new member state wishes to slow down the process, with full agreement that this package should be agreed as early as possible, even before December," he told Reuters.
Dimas was optimistic the rift would not slow an accord.
"Prospects are very good for an agreement by the end of the year," he said. (Editing by Dale Hudson)