By Joe Leahy in Mumbai
Published: October 14 2008 17:10
India’s Tata Motors has moved a step closer to realising its plan to release an electric vehicle into the European market with its acquisition on Tuesday of a controlling stake in a small Norwegian electric vehicle company, Miljo Grenland/Innovasjon.
Tata Motors’ UK subsidiary, Tata Motors European Technical Centre, will pay Rs94m ($2m) for a 50.3 per cent stake in Miljo, a specialist in polymer lithium ion batteries.
The Norwegian company will produce electric vehicles based on Tata Motors’ products, with the first slated to be the Indica EV, a sedan to be launched in Europe next year.
“Unlike existing electric vehicles, Indica EV will be a more practicable option for the consumer; capable of carrying four people, adequate luggage space, with a predicted range of up to 200 kilometres and acceleration of 0-60 kmph in under 10 seconds,” Tata Motors said in a statement.
The move comes as Indian automakers are increasingly looking to target the European market with low-cost and electric vehicles.
Maruti Suzuki, India’s largest carmaker, and Japan’s Nissan Motor are showcasing Indian-made city cars destined for customers in Europe next year, while Indian automaker, Argentum Motors, is exploring the idea of selling electric cars .
The Suzuki Alto and Nissan Pixo will be made at a factory in Manesar, northern India, under a partnership agreement and will mark the country’s first large-scale foray into car exports to western Europe.
Tata Motors, once better known for the simple but sturdy trucks that are ubiquitous throughout India, has become a major carmaker in recent years.
Copyright The Financial Times Limited 2008
Wednesday, 15 October 2008
BYD Set to Launch Electric Car
By NORIHIKO SHIROUZU
SHENZHEN, China -- A Chinese company best-known for making cellphone batteries says it is on the verge of launching the country's first mass-produced electric car and may also have lined up its first large purchase order.
In an interview, BYD Co. Chairman Wang Chuanfu said the car, known as the F3DM, will be on sale in China by the end of November, pending government approval. Mr. Wang declined to provide a sales target or price range for the new electric car but said in Beijing earlier this year that the vehicle could carry a price tag of about 150,000 yuan ($22,000) and is capable of going as far as 110 kilometers on electricity when fully charged.
Industry analysts say the new car -- a key reason why investor Warren Buffett recently decided to invest $230 million for a 10% stake in Mr. Wang's company -- is similar in design to General Motors Corp.'s Chevy Volt but is due to hit the market two years earlier than either the Volt or Toyota Motor Corp.'s new breed of hybrid-electric car. Both GM and Toyota say they are taking more time to make sure lithium-ion batteries they are using for their electric cars are safe.
BYD uses iron-phosphate-based lithium-ion batteries, which it claims it has developed on its own, for the F3DM. Mr. Wang has said those batteries are "inherently safe" because they are more chemically stable, although they compromise to some extent on the ability to pack energy in each cell, compared with more conventional lithium-ion batteries.
The Shenzhen company, better-known for being a top global producer of rechargeable batteries for cellphones and other devices, began producing cars in 2005. It has since become one of China's fast-growing home-grown car brands, with a small number of cars, including the gasoline-powered F3 compact sedan. The new car will carry a small gasoline combustion engine to charge the car's battery when it runs out or to assist the electric engine when accelerating.
Mr. Wang also said hemay have found a new buyer: the company's hometown. Shenzhen, a key manufacturing center across the border from Hong Kong, is planning to replace some of its taxis and buses with electric and gas-electric hybrids.
Though no final decisions have been made, Shenzhen Mayor Xu Zongheng confirmed that the city is considering whether to push local cab and bus companies to buy "green" technologies. "As far as encouraging use of vehicles driven by electric motors, we are doing this in a progressive way; gradually we are going to realize more use of electric-powered vehicles in Shenzhen."
The city at the end of last year had about 8,000 buses, 2,500 minibuses and 11,000 taxis in operation, according to the statistics bureau of Shenzhen. Mr. Xu stopped short of saying BYD's car would be used, but those familiar with the city's plans say Shenzhen would likely follow a pattern common in most Chinese cities of using locally produced automobiles.
BYD's ability to offer a green car at a relatively affordable price is a factor that MidAmerican Energy Holdings Co., which is 87.4%-owned by Mr. Buffett's Berkshire Hathaway Inc., cited for its investment in BYD. According to BYD's Mr. Wang, the company may accelerate its plans for entering the U.S. and European markets by using MidAmerican Energy's money.
BYD has no concrete plans for launching products in the U.S. and European markets, but its officials said a hybrid-electric version of the company's F6 gasoline-powered sedan could hit the U.S. market as early as 2010.—Gao Sen in Beijing contributed to this article.
Write to Norihiko Shirouzu at norihiko.shirouzu@wsj.com
SHENZHEN, China -- A Chinese company best-known for making cellphone batteries says it is on the verge of launching the country's first mass-produced electric car and may also have lined up its first large purchase order.
In an interview, BYD Co. Chairman Wang Chuanfu said the car, known as the F3DM, will be on sale in China by the end of November, pending government approval. Mr. Wang declined to provide a sales target or price range for the new electric car but said in Beijing earlier this year that the vehicle could carry a price tag of about 150,000 yuan ($22,000) and is capable of going as far as 110 kilometers on electricity when fully charged.
Industry analysts say the new car -- a key reason why investor Warren Buffett recently decided to invest $230 million for a 10% stake in Mr. Wang's company -- is similar in design to General Motors Corp.'s Chevy Volt but is due to hit the market two years earlier than either the Volt or Toyota Motor Corp.'s new breed of hybrid-electric car. Both GM and Toyota say they are taking more time to make sure lithium-ion batteries they are using for their electric cars are safe.
BYD uses iron-phosphate-based lithium-ion batteries, which it claims it has developed on its own, for the F3DM. Mr. Wang has said those batteries are "inherently safe" because they are more chemically stable, although they compromise to some extent on the ability to pack energy in each cell, compared with more conventional lithium-ion batteries.
The Shenzhen company, better-known for being a top global producer of rechargeable batteries for cellphones and other devices, began producing cars in 2005. It has since become one of China's fast-growing home-grown car brands, with a small number of cars, including the gasoline-powered F3 compact sedan. The new car will carry a small gasoline combustion engine to charge the car's battery when it runs out or to assist the electric engine when accelerating.
Mr. Wang also said hemay have found a new buyer: the company's hometown. Shenzhen, a key manufacturing center across the border from Hong Kong, is planning to replace some of its taxis and buses with electric and gas-electric hybrids.
Though no final decisions have been made, Shenzhen Mayor Xu Zongheng confirmed that the city is considering whether to push local cab and bus companies to buy "green" technologies. "As far as encouraging use of vehicles driven by electric motors, we are doing this in a progressive way; gradually we are going to realize more use of electric-powered vehicles in Shenzhen."
The city at the end of last year had about 8,000 buses, 2,500 minibuses and 11,000 taxis in operation, according to the statistics bureau of Shenzhen. Mr. Xu stopped short of saying BYD's car would be used, but those familiar with the city's plans say Shenzhen would likely follow a pattern common in most Chinese cities of using locally produced automobiles.
BYD's ability to offer a green car at a relatively affordable price is a factor that MidAmerican Energy Holdings Co., which is 87.4%-owned by Mr. Buffett's Berkshire Hathaway Inc., cited for its investment in BYD. According to BYD's Mr. Wang, the company may accelerate its plans for entering the U.S. and European markets by using MidAmerican Energy's money.
BYD has no concrete plans for launching products in the U.S. and European markets, but its officials said a hybrid-electric version of the company's F6 gasoline-powered sedan could hit the U.S. market as early as 2010.—Gao Sen in Beijing contributed to this article.
Write to Norihiko Shirouzu at norihiko.shirouzu@wsj.com
Energy concerns rekindle love affair with open fires
Sales of woodburning stoves and demand for chimney sweeps and coal surge amid fears about energy supplies
Juliette Jowit
guardian.co.uk,
Tuesday October 14 2008 10.51 BST
Logs burning on an open fire. Photographer: Stephen Simpson
Faced with the gloom of winter, expensive heating bills and global insecurity, people are returning to the comforts of the hearth with a boom in open fires and wood-burners.
Solid fuel burners, chimney sweeps and coal merchants are all reporting a surge in business as customers try to find a cheaper way of heating their homes, and some even cite worries about energy supplies running out during a severe cold snap.
Instinct, though, might also be playing a part. For at least 125,000 years, probably much longer, fire has cooked food and offered warmth in cold climates and scared away predators — making it very important to humans, said evolutionary psychologist Dr Lance Workman.
"There are so many advantages it seems likely to me that fire has played an important role in human evolution and that this is why we still find it rewarding today," he said. "We don't simply 'un-evolve' such reward systems just because we live in centrally heated houses today."
Fire was the only way to heat homes for millennia. But the availability of electricity and central heating has encouraged more than nine out of 10 homeowners in the UK to switch to radiators and artificial fires since the 1960s.
The fashion for open fires was reignited several years ago, thanks to home makeover and design programmes. Interest in solid fuel burners has also been flickering to life as homeowners turned to burning fuel and pellets as an environmentally friendly alternative to gas and oil heating.
But manufacturers and retailers say there has been a noticeable jump in sales this year. The Solid Fuel Association said members reported a 40% increase this year; the National Association of Chimney Sweeps said there had been a "resurgence" of demand and some businesses had waiting lists of two or three months; the president of the Coal Merchants Federation said his sales were up 20% and fellow members were enjoying similar rises; and the country's biggest chimney and flue business saw a jump of 50% in September, .
Richard Hiblen, national manager of chimney and flue suppliers Specflue, said: "The honest answer is as soon as British Gas put up their prices we see a big surge."
The dominant issue appears to be price: figures from the Solid Fuel Technology Institute suggest burning wood alone or mixed with coal costs nearly half the price of gas or oil and one third of electricity for every "useful" unit of energy produced — not including supplies for free from skips and the countryside.
Another common concern is security of supplies, especially after several winters of reports that Britain almost ran out of energy, and problems with Russian exports of gas to Europe.
"That's a real concern, and worry for elderly people: they are the generation who experienced 30 or 40 years of the cold war with the Russians," said Martin Glynn, who runs a busy chimney sweep business and is president of the National Association of Chimney Sweeps.
There has also been growing concern about climate change, leading some homes to swap carbon-polluting fossil fuels to burning "carbon neutral" wood and wood pellets, which are said to absorb as much carbon in growing as they release in burning.
The growing popularity of coal has raised some concern about the environmental downside of home fires. But the scale is currently small, says Jim Lambeth, general manager of the Solid Fuel Association. "The amount of emissions coming out of the chimney is infinitesimal in comparison with the millions of people burning gas."
And as more homes turn to fires and stoves, more "younger" people are realising how warm they can be, claim supporters. "It's a real living fire: it doesn't just heat the area surrounding, it heats the fabric of the house," said Alan Wright, managing director of the country's second biggest coal merchant, Corralls Coal.
But beyond the practical advantages of keeping predators at bay or making the budget meet, a big part of the appeal of a fire will be the romance or comfort of it, say supporters.
"We have an electric fire that has artificial flames, even without heat," said Workman. "As nights draw in I find myself putting it on because it's comforting even if it's not cold, and I think other people would do likewise."
Juliette Jowit
guardian.co.uk,
Tuesday October 14 2008 10.51 BST
Logs burning on an open fire. Photographer: Stephen Simpson
Faced with the gloom of winter, expensive heating bills and global insecurity, people are returning to the comforts of the hearth with a boom in open fires and wood-burners.
Solid fuel burners, chimney sweeps and coal merchants are all reporting a surge in business as customers try to find a cheaper way of heating their homes, and some even cite worries about energy supplies running out during a severe cold snap.
Instinct, though, might also be playing a part. For at least 125,000 years, probably much longer, fire has cooked food and offered warmth in cold climates and scared away predators — making it very important to humans, said evolutionary psychologist Dr Lance Workman.
"There are so many advantages it seems likely to me that fire has played an important role in human evolution and that this is why we still find it rewarding today," he said. "We don't simply 'un-evolve' such reward systems just because we live in centrally heated houses today."
Fire was the only way to heat homes for millennia. But the availability of electricity and central heating has encouraged more than nine out of 10 homeowners in the UK to switch to radiators and artificial fires since the 1960s.
The fashion for open fires was reignited several years ago, thanks to home makeover and design programmes. Interest in solid fuel burners has also been flickering to life as homeowners turned to burning fuel and pellets as an environmentally friendly alternative to gas and oil heating.
But manufacturers and retailers say there has been a noticeable jump in sales this year. The Solid Fuel Association said members reported a 40% increase this year; the National Association of Chimney Sweeps said there had been a "resurgence" of demand and some businesses had waiting lists of two or three months; the president of the Coal Merchants Federation said his sales were up 20% and fellow members were enjoying similar rises; and the country's biggest chimney and flue business saw a jump of 50% in September, .
Richard Hiblen, national manager of chimney and flue suppliers Specflue, said: "The honest answer is as soon as British Gas put up their prices we see a big surge."
The dominant issue appears to be price: figures from the Solid Fuel Technology Institute suggest burning wood alone or mixed with coal costs nearly half the price of gas or oil and one third of electricity for every "useful" unit of energy produced — not including supplies for free from skips and the countryside.
Another common concern is security of supplies, especially after several winters of reports that Britain almost ran out of energy, and problems with Russian exports of gas to Europe.
"That's a real concern, and worry for elderly people: they are the generation who experienced 30 or 40 years of the cold war with the Russians," said Martin Glynn, who runs a busy chimney sweep business and is president of the National Association of Chimney Sweeps.
There has also been growing concern about climate change, leading some homes to swap carbon-polluting fossil fuels to burning "carbon neutral" wood and wood pellets, which are said to absorb as much carbon in growing as they release in burning.
The growing popularity of coal has raised some concern about the environmental downside of home fires. But the scale is currently small, says Jim Lambeth, general manager of the Solid Fuel Association. "The amount of emissions coming out of the chimney is infinitesimal in comparison with the millions of people burning gas."
And as more homes turn to fires and stoves, more "younger" people are realising how warm they can be, claim supporters. "It's a real living fire: it doesn't just heat the area surrounding, it heats the fabric of the house," said Alan Wright, managing director of the country's second biggest coal merchant, Corralls Coal.
But beyond the practical advantages of keeping predators at bay or making the budget meet, a big part of the appeal of a fire will be the romance or comfort of it, say supporters.
"We have an electric fire that has artificial flames, even without heat," said Workman. "As nights draw in I find myself putting it on because it's comforting even if it's not cold, and I think other people would do likewise."
Rich nations 'should pay poor ones billions a year to save rainforests'
Robin Pagnamenta and Lewis Smith
Wealthy nations should pay dozens of the world's poorest countries up to £19-billion a year to preserve their rainforests, according to a report commissioned by Gordon Brown.
The cash would fund a scheme where tropical countries would be rewarded for preserving the stock of carbon in their remaining forests. Proceeds would go to local communities.
“We are living on borrowed time,” said the report's author, Johann Eliasch, a Swedish multimillionaire businessman and deforestation campaigner who was appointed as the Prime Minister's special representative on deforestation and clean energy last year. “Deforestation will continue as long as cutting down trees is more economic than preserving them.”
Rainforest destruction is a key contributor to global warming, accounting for one fifth of carbon emissions.
The cash would fund a scheme where tropical countries would be rewarded for preserving the stock of carbon in their remaining forests. Proceeds would go to local communities.
“We are living on borrowed time,” said the report's author, Johann Eliasch, a Swedish multimillionaire businessman and deforestation campaigner who was appointed as the Prime Minister's special representative on deforestation and clean energy last year. “Deforestation will continue as long as cutting down trees is more economic than preserving them.”
Rainforest destruction is a key contributor to global warming, accounting for one fifth of carbon emissions.
Mr Eliasch, who owns a 162,000-hectare (400,000-acre) tract of the Brazilian Amazon and is a former deputy treasurer of the Conservative Party, said that the scheme would be monitored using satellite imagery.
The report said that the scheme would need to raise between $17billion and $33 billion a year to halve the destruction of the world's forests by 2020. Current funding to tackle global deforestation is about $564million (£328million).
The goal would be to make the global forest sector “carbon neutral” by 2030, in other words, to balance all of the forest lost annually with new forest planted.
Green groups, however, criticised the plans for failing to respect the rights of indigenous forest peoples, and for creating an opportunity for polluting nations simply to pay their way out of commitments to cut their own carbon emissions.
Andy Tait, head of biodiversity at Greenpeace, said that the proposals risked allowing forests “to become a 'get out of jail free' card for the big polluters”. Other critics said that the system would be vulnerable to corruption and could prompt human rights abuses as governments and landowners resorted to force to protect forests.
“This scheme has the potential to cause even greater conflict over forests,” said Tom Pickens, of Friends of the Earth.
Mr Eliasch said that the scheme would take five years to start up in 40 nations, including Cameroon, Papua New Guinea and Indonesia. He proposed that it be included in any carbon trading agreement reached at a meeting of the UN Climate Change Conference in Copenhagen next year.
Since 1980 global forest cover is estimated to have fallen by 225 million hectares because of human action. In the Tropics, an area about the size of England is cleared every year.
The report said that the scheme would need to raise between $17billion and $33 billion a year to halve the destruction of the world's forests by 2020. Current funding to tackle global deforestation is about $564million (£328million).
The goal would be to make the global forest sector “carbon neutral” by 2030, in other words, to balance all of the forest lost annually with new forest planted.
Green groups, however, criticised the plans for failing to respect the rights of indigenous forest peoples, and for creating an opportunity for polluting nations simply to pay their way out of commitments to cut their own carbon emissions.
Andy Tait, head of biodiversity at Greenpeace, said that the proposals risked allowing forests “to become a 'get out of jail free' card for the big polluters”. Other critics said that the system would be vulnerable to corruption and could prompt human rights abuses as governments and landowners resorted to force to protect forests.
“This scheme has the potential to cause even greater conflict over forests,” said Tom Pickens, of Friends of the Earth.
Mr Eliasch said that the scheme would take five years to start up in 40 nations, including Cameroon, Papua New Guinea and Indonesia. He proposed that it be included in any carbon trading agreement reached at a meeting of the UN Climate Change Conference in Copenhagen next year.
Since 1980 global forest cover is estimated to have fallen by 225 million hectares because of human action. In the Tropics, an area about the size of England is cleared every year.
EU climate pact in crisis ahead of summit
• Friction over methods to meet agreed targets • Sarkozy proposals face UK and German opposition
Ian Traynor in Brussels
The Guardian,
Wednesday October 15 2008
French attempts to craft a global warming pact to make the EU a world leader in tackling climate change are gridlocked, with governments unable to agree on how to share the pain and costs of slashing greenhouse gases by 20% within 12 years.
A European summit tonight in Brussels will fail to agree on the means to the end of meeting the EU's ambitious targets, warned diplomats and officials.
The deal has to be struck by the end of the year for the package, which was agreed unanimously by European governments 18 months ago, to become European law.
But senior officials and diplomats doubt whether that will be possible despite the fanfare that accompanied the unveiling of the policy last year.
"The targets have been agreed and we have presented them all over the world," said José Manuel Barroso, the European Commission chief. "There will be a real problem of credibility for Europe."
He added: "Saving the planet is not an after-dinner drink, a digestif that you take or leave. Climate change does not disappear because of the financial crisis."
Nicolas Sarkozy, France's president and current EU president, has been told that his proposals for tonight's summit have no chance of being supported, with some of the 27 countries arguing that the financial crisis means that the Europeans can no longer afford the huge costs entailed.
"In this difficult situation, it's only natural that governments become more defensive and prudent," the European Commission chief said.
On Monday, Franco Frattini, the Italian foreign minister, told a meeting of his European counterparts that, with Europe heading into recession, the entire complex package should be renegotiated.
The foreign secretary, David Miliband, opposed the Italian demands, arguing that if Europe was grappling with the credit crunch, it also was confronting a "resource crunch" that made the climate change package all the more urgent.
But while British ministers say they support the plan, they are also trying to water down some of its key provisions. The energy and climate change secretary, the foreign secretary's brother, Ed Miliband, last week failed to get the rest of the EU to exempt the aviation sector from a central element of the climate change package - that which obliges Europe to obtain 20% of its energy mix from renewable sources by the 2020 deadline.
Sarkozy's effort to build a consensus has already seen him scale back his ambitions, according to sources. But he has still encountered a wall of insuperable opposition on several fronts.
The heart of the plan is the so-called emissions trading scheme which forces European industries to buy permits to pollute, encouraging them to save money by becoming cleaner.
But amid furious objections, particularly from Germany, Sarkozy has proposed that especially energy-intensive industries such as the steel, aluminium and cement sectors be awarded their pollution permits for free to prevent them abandoning Europe and moving their business elsewhere. Britain and others reject the blanket exemption for these sectors.
However, there is also widespread concern that Europe will simply export jobs and businesses without making any difference to carbon dioxide emissions.
Ian Traynor in Brussels
The Guardian,
Wednesday October 15 2008
French attempts to craft a global warming pact to make the EU a world leader in tackling climate change are gridlocked, with governments unable to agree on how to share the pain and costs of slashing greenhouse gases by 20% within 12 years.
A European summit tonight in Brussels will fail to agree on the means to the end of meeting the EU's ambitious targets, warned diplomats and officials.
The deal has to be struck by the end of the year for the package, which was agreed unanimously by European governments 18 months ago, to become European law.
But senior officials and diplomats doubt whether that will be possible despite the fanfare that accompanied the unveiling of the policy last year.
"The targets have been agreed and we have presented them all over the world," said José Manuel Barroso, the European Commission chief. "There will be a real problem of credibility for Europe."
He added: "Saving the planet is not an after-dinner drink, a digestif that you take or leave. Climate change does not disappear because of the financial crisis."
Nicolas Sarkozy, France's president and current EU president, has been told that his proposals for tonight's summit have no chance of being supported, with some of the 27 countries arguing that the financial crisis means that the Europeans can no longer afford the huge costs entailed.
"In this difficult situation, it's only natural that governments become more defensive and prudent," the European Commission chief said.
On Monday, Franco Frattini, the Italian foreign minister, told a meeting of his European counterparts that, with Europe heading into recession, the entire complex package should be renegotiated.
The foreign secretary, David Miliband, opposed the Italian demands, arguing that if Europe was grappling with the credit crunch, it also was confronting a "resource crunch" that made the climate change package all the more urgent.
But while British ministers say they support the plan, they are also trying to water down some of its key provisions. The energy and climate change secretary, the foreign secretary's brother, Ed Miliband, last week failed to get the rest of the EU to exempt the aviation sector from a central element of the climate change package - that which obliges Europe to obtain 20% of its energy mix from renewable sources by the 2020 deadline.
Sarkozy's effort to build a consensus has already seen him scale back his ambitions, according to sources. But he has still encountered a wall of insuperable opposition on several fronts.
The heart of the plan is the so-called emissions trading scheme which forces European industries to buy permits to pollute, encouraging them to save money by becoming cleaner.
But amid furious objections, particularly from Germany, Sarkozy has proposed that especially energy-intensive industries such as the steel, aluminium and cement sectors be awarded their pollution permits for free to prevent them abandoning Europe and moving their business elsewhere. Britain and others reject the blanket exemption for these sectors.
However, there is also widespread concern that Europe will simply export jobs and businesses without making any difference to carbon dioxide emissions.
Huge fight looms in EU over climate change
By Stephen Castle and James Kanter
Published: October 14, 2008
BRUSSELS: Relief over the success of Europe's intervention in the banking crisis will give way Wednesday to discord over climate change, with nations battling over whether a looming recession makes European Union carbon-reduction targets unaffordable.
After two weeks of crisis diplomacy over the banking meltdown, European leaders will gather in Brussels for a two-day summit meeting that probably will be dominated by the impact of the economic turbulence and expectations of a sharp downturn.
On the eve of the meeting, Franco Frattini, the Italian foreign minister and former European commissioner, called for "flexibility" over the EU's ambitious plans to reduce planet-warming emissions by 20 percent by 2020, pointing out that such measures would cost 1.14 percent of his country's gross national product. Speaking in Rome, Frattini called for the proposals to be accompanied by an "impact study on the real economy," the news agency Ansa reported.
Germany is arguing for protection against foreign competition for sectors like steel, cement and aluminum, and Poland says it should have to shoulder less of the burden of combating global warming.
The dispute is one example of how the financial crisis has changed Europe's political landscape in several respects.
The success of the bank rescue agreement, announced Sunday and modeled in part on Britain's bailout proposals, has proved the value of pan-European intervention. But fears of a recession may prompt nations to abandon important investments and to extract themselves from existing commitments.
At the summit meeting, France, which holds the rotating EU presidency, will seek to persuade all 27 member nations to sign on to most of the principles of the banking rescue package agreed to by the 15 euro-zone nations.
On Wednesday, the European Commission, the EU's executive body, will propose initiatives to change accounting rules so that assets will not have to be revalued so often, and to guarantee bank deposits of up to €50,000.
Plans are being drawn up to establish a college of regulators to coordinate banking oversight. And future proposals are also being promised from the Commission on executive pay and possible regulation for hedge funds.
At the same time, EU officials are worried that several countries will use the crisis to try to dismantle long-established rules designed to deter state aid to ailing companies, one of the pillars of the EU's internal market.
The European commissioner for science and research, Janez Potocnik, predicted a reduction in European research and development, but said that that would be an error. "We must be careful that by trying to fix the crisis in the financial sector we do not simply displace the problems to another part of the economy," Potocnik said.
The most immediate division is set to surface over climate change, which was to be discussed at a dinner of heads of government Wednesday night.
The European Commission president, José Manuel Barroso, warned Tuesday that if the EU signaled that it considered climate change a less-urgent challenge, "that could be the end of the global effort."
"This is not a luxury we now have to forgo," Barroso said in Brussels. "Saving the planet is not an after-dinner drink, a 'digestif' that you take or leave. Climate change does not disappear because of the financial crisis."
But diplomats said the member states were divided over how to distribute the burden of tackling climate change among the bloc's 27 nations, and, in particular, whether newer states like Poland should get an easier ride.
Another issue dividing the EU is the extent to which governments should be obliged to plow money generated by the bloc's emissions-trading program into efforts to curb climate change.
An annex to the draft conclusions of the summit meeting, put forward by France, seeks to earmark funds generated toward climate efforts. Other nations regard that as trampling on their fiscal sovereignty. The annex also argues for concessions for heavy industrial users of carbon if a global deal on carbon dioxide reduction cannot be agreed upon.
It calls for 100 percent of allowances to be given free to the most affected companies and for a list of the criteria used to determine them to be set beginning in 2009. The European Parliament and the European Commission want such a decision in 2010.
An earlier date would be controversial because environmental campaigners argue that it would undermine confidence in the ability of a conference in Copenhagen to negotiate an international climate treaty in late 2009.
That would "trigger an international race to the bottom for weak climate policies for these sectors" because nations like India, China and the United States would "also try to protect the same industries," said Joris den Blanken, climate and energy policy director for the European unit of Greenpeace in Brussels.
Serious rumbling began several weeks ago over reforms to the emissions trading system. Those reforms seek to make the industries covered by the system buy the majority of their permits to pollute by 2013, to raise the cost of polluting and drive new, cleaner technologies.
One of the most vocal opponent is Poland, which generates almost all its electricity from highly polluting coal. If the price of emitting goes up dramatically, that would force Polish utilities to spend more on complying with the regulations than utilities in, say, France, where the majority of electricity comes from nuclear power, which produces little carbon dioxide.
In recent weeks, Poland reached accords with Hungary, Slovakia, Bulgaria, Romania and Greece to lobby for a more gradual approach to the reforms.
Published: October 14, 2008
BRUSSELS: Relief over the success of Europe's intervention in the banking crisis will give way Wednesday to discord over climate change, with nations battling over whether a looming recession makes European Union carbon-reduction targets unaffordable.
After two weeks of crisis diplomacy over the banking meltdown, European leaders will gather in Brussels for a two-day summit meeting that probably will be dominated by the impact of the economic turbulence and expectations of a sharp downturn.
On the eve of the meeting, Franco Frattini, the Italian foreign minister and former European commissioner, called for "flexibility" over the EU's ambitious plans to reduce planet-warming emissions by 20 percent by 2020, pointing out that such measures would cost 1.14 percent of his country's gross national product. Speaking in Rome, Frattini called for the proposals to be accompanied by an "impact study on the real economy," the news agency Ansa reported.
Germany is arguing for protection against foreign competition for sectors like steel, cement and aluminum, and Poland says it should have to shoulder less of the burden of combating global warming.
The dispute is one example of how the financial crisis has changed Europe's political landscape in several respects.
The success of the bank rescue agreement, announced Sunday and modeled in part on Britain's bailout proposals, has proved the value of pan-European intervention. But fears of a recession may prompt nations to abandon important investments and to extract themselves from existing commitments.
At the summit meeting, France, which holds the rotating EU presidency, will seek to persuade all 27 member nations to sign on to most of the principles of the banking rescue package agreed to by the 15 euro-zone nations.
On Wednesday, the European Commission, the EU's executive body, will propose initiatives to change accounting rules so that assets will not have to be revalued so often, and to guarantee bank deposits of up to €50,000.
Plans are being drawn up to establish a college of regulators to coordinate banking oversight. And future proposals are also being promised from the Commission on executive pay and possible regulation for hedge funds.
At the same time, EU officials are worried that several countries will use the crisis to try to dismantle long-established rules designed to deter state aid to ailing companies, one of the pillars of the EU's internal market.
The European commissioner for science and research, Janez Potocnik, predicted a reduction in European research and development, but said that that would be an error. "We must be careful that by trying to fix the crisis in the financial sector we do not simply displace the problems to another part of the economy," Potocnik said.
The most immediate division is set to surface over climate change, which was to be discussed at a dinner of heads of government Wednesday night.
The European Commission president, José Manuel Barroso, warned Tuesday that if the EU signaled that it considered climate change a less-urgent challenge, "that could be the end of the global effort."
"This is not a luxury we now have to forgo," Barroso said in Brussels. "Saving the planet is not an after-dinner drink, a 'digestif' that you take or leave. Climate change does not disappear because of the financial crisis."
But diplomats said the member states were divided over how to distribute the burden of tackling climate change among the bloc's 27 nations, and, in particular, whether newer states like Poland should get an easier ride.
Another issue dividing the EU is the extent to which governments should be obliged to plow money generated by the bloc's emissions-trading program into efforts to curb climate change.
An annex to the draft conclusions of the summit meeting, put forward by France, seeks to earmark funds generated toward climate efforts. Other nations regard that as trampling on their fiscal sovereignty. The annex also argues for concessions for heavy industrial users of carbon if a global deal on carbon dioxide reduction cannot be agreed upon.
It calls for 100 percent of allowances to be given free to the most affected companies and for a list of the criteria used to determine them to be set beginning in 2009. The European Parliament and the European Commission want such a decision in 2010.
An earlier date would be controversial because environmental campaigners argue that it would undermine confidence in the ability of a conference in Copenhagen to negotiate an international climate treaty in late 2009.
That would "trigger an international race to the bottom for weak climate policies for these sectors" because nations like India, China and the United States would "also try to protect the same industries," said Joris den Blanken, climate and energy policy director for the European unit of Greenpeace in Brussels.
Serious rumbling began several weeks ago over reforms to the emissions trading system. Those reforms seek to make the industries covered by the system buy the majority of their permits to pollute by 2013, to raise the cost of polluting and drive new, cleaner technologies.
One of the most vocal opponent is Poland, which generates almost all its electricity from highly polluting coal. If the price of emitting goes up dramatically, that would force Polish utilities to spend more on complying with the regulations than utilities in, say, France, where the majority of electricity comes from nuclear power, which produces little carbon dioxide.
In recent weeks, Poland reached accords with Hungary, Slovakia, Bulgaria, Romania and Greece to lobby for a more gradual approach to the reforms.
Subscribe to:
Posts (Atom)
Posts
