In tough times, some in EU try to backpedal on climate pledge

By James Kanter
Published: October 20, 2008

BRUSSELS: Does the European Union's vaunted role as a global leader in combating climate change risk becoming the next victim of the financial crisis?
Policies aimed at improving sustainability and the environment often are put on the back burner in times of financial hardship. Despite the global attention being paid to the dangers of climate change, this time is beginning to look no different.
As the threats of global recession and rising unemployment loom large in the wake of expensive bank bailouts, some EU leaders are demanding that the trade bloc backpedal on a pledge - announced with much fanfare last spring - to cut greenhouse gases by 20 percent and to generate 20 percent of power through renewable sources by 2020.
At a meeting Monday in Luxembourg, the Italian environment minister, Stefania Prestigiacomo, warned that her country had "many requests for changes," and would only support turning the potentially expensive pledge into a European law if the whole thing could be reviewed again next year.
That follows threats by prime ministers Silvio Berlusconi of Italy, Donald Tusk of Poland, Ivars Godmanis of Latvia and others at the EU summit meeting in Brussels last week to veto the measures unless they were watered down.

The French president, Nicolas Sarkozy, has pushed EU leaders to stick to the deadline of December. That is also when negotiations are to start on extending beyond 2012 global efforts at cutting greenhouse gases under the Kyoto climate treaty. But it is looking less likely.
"There is now a greater possibility that the EU misses a deadline it set for itself," Yvo de Boer, the executive secretary of the UN Framework Convention on Climate Change, said Monday. "That would call into question Europe's willingness to back up an offer that was applauded by the whole world with specific policies."
EU leaders left the summit meeting last week saying that they would need unanimity to push forward.
Meanwhile, the imminent election of a new president of the United States is likely to make policy on climate change more proactive. That could further diminish the global influence that Europeans so far have been able to claim.
"We should not rule out that at some stage whoever becomes president may have completely new ideas," said Christian Egenhofer, an energy and climate expert at the Center for European Policy Studies in Brussels. "If the EU doesn't have its policies in place it could be a very weak discussion partner."
Some energy experts say that EU policy makers seriously misunderstood how difficult it would be to transform the energy sector.
Thomas Schneider, a member of IEEE, a professional association for the advancement of technology, said that some of the most direct ways to lower CO2 would be to roll out large numbers of windmills and nuclear power plants. But he warned that even under the most promising timelines, that would be difficult for Europe to achieve by 2020.
"The financial crisis has exacerbated the issue of how Europe would meet its targets, but this is mainly an engineering problem," Schneider said.
Even before the credit crunch became a full-fledged banking crisis, European countries were displaying different levels of enthusiasm for the measures.
On one side are Poland and other coal-dependent nations in Eastern Europe, as well as Italy. These countries face potentially higher costs under a system that caps carbon dioxide emissions from heavy industry, as introduced in 2005.
Italy also faces a precarious fiscal situation, and Berlusconi's center-right government is loath to spend more money on greener technologies.
Some of these countries also say that they are being asked to do too much too quickly in areas of renewable energy and energy efficiency.
On the other side is France, which generates most of its power from nuclear sources that are virtually free of CO2, and Britain, which broadly favors climate regulation, partly because it has become a global hub for trading permits to emit carbon dioxide. Also favoring regulation are the Dutch and most of the Nordic countries, which have successfully implemented a number of initiatives to replace fossil fuel-fired power with renewable sources of energy.
EU officials in Brussels warn that signs of a weakening commitment by European leaders to fighting climate change could start a chain reaction, lowering ambitions among other central players, like China and India. The resolve of some developing countries to participate in a global climate deal could also weaken if they anticipate that a cash-strapped Europe will become stingier.
The EU system to control emissions is based on the sale of permits to emit carbon that are worth billions of euros. Under the planned overhaul of the system, industries would have to pay for a substantially larger portion of those permits than in the past.
Revenue would likely be earmarked for EU governments, but some of the funds could go toward helping developing countries combat climate change, like helping them avoid deforestation in exchange for commitments to upgrade their own efforts to fight global warning.
De Boer, the UN climate official, said that developing nations already had made it clear that they expected more financial support in exchange for becoming part of a global agreement.
He added that one positive result of the financial crisis might be seen if governments are able to tweak the rules on loans when it comes time to sell the banks in which they have taken stakes. They could require bankers to review their investments more carefully for risks related to global warming.
"We're in this pickle in the first place because these banks made unwise loans," de Boer said. "Giving a loan that doesn't take climate change into account also is an unwise loan."