Brussels ‘opens debate' on jump to 30% CO2 cuts

26.05.10 @ 17:32

  1. By Leigh Phillips

BRUSSELS - The European Commission has come out in favour of a unilateral jump to a 30 percent cut in greenhouse gas emissions but is reluctant to say so too loudly.

  • A steel furnace: The steel industry is 'relieved' that Brussels has not called for a unilateral jump to a 30 percent cut (Photo: wikipedia)

On Wednesday, the EU executive endorsed an analysis that showed that as a result of the economic crisis and its accompanying decline in industrial output, the costs of moving from its current commitment of a 20 percent cut in emissions to 30 percent were not as significant as once thought.

Since 2007, the EU has said it would move to the higher emissions cut by 2020 if other major economies also took on their ‘fair share' of the effort, although the details of what a fair share means are vague.

The discussion is now on whether the EU should unilaterally move to a 30 percent cut both to give an incentive for investment in green technologies and to reclaim Europe's international climate leadership, thought lost in Copenhagen.

In presenting the report, the commissioner for climate action, Connie Hedegaard, said she is somewhat overwhelmed at how quickly competing economies are embracing new environmentally friendly technologies.

"You cannot believe how fast things are moving out there - at a surreal speed," she said of a recent visit to China. "This is the business of the 21st century, it's happening in Korea and Brazil as well."

"If we stand still, we will lose our front-runner status."

As a result of the economic crisis, the cost of meeting the 20 percent target has plummeted from €70 billion per year to €48 billion, according to the commission document.

Meanwhile, the cost of reaching the 30 percent target is now estimated to be €81 billion - just €11 billion higher than how much the EU had originally thought it would have cost to move to its 20 percent target.

Higher energy prices have also encouraged energy efficiency and reduced energy demand and the price of carbon has fallen below the level projected in 2008 as EU ETS allowances not used in the recession are carried forward.

"However, at the same time, this reduction in absolute costs comes in the context of a crisis which has left businesses with much less capacity to find the investment needed to modernise in the short run," notes the commission.

Indeed, when unveiling a report that showed how much cheaper it is now to move to the higher target and how the EU can go about doing it, Ms Hedegaard said explicitly now is not the right time to make such a move.

"Are conditions right? Would it make sense at this moment? The answer would be no," she said, adding that it was a "political decision" for EU leaders to make "when the timing and conditions are right.

"As we exit the crisis, the commission has now provided input for a fact-based discussion. The decision is not for now," continued the Danish commissioner, who is known to personally strongly back a unilateral jump to the higher target.

"But I hope that our analysis will inspire the debate in the member states on the way forward."

Firing a shot across the bow on the eve of the publication of the report, France and Germany jointly attacked a move to 30 percent. Poland and Italy feel that the move is premature.

At the same time, the new Conservative-Liberal coalition government in the UK, however, is sticking by its Labour predecessor's line that it is in the EU's best interest to make the shift, and even included such a commitment in the new administration's coalition agreement.

UK secretary of state for energy and climate, Chris Huhne, welcomed the report, saying: "Global climate change is the biggest challenges the world faces and securing an ambitious deal is a priority for this government. That's why we will push for the EU to demonstrate leadership by supporting an increase in the EU emissions reduction target to 30 percent by 2020."

Industry was overjoyed at the procrastination, describing the confusing end result of the investigation a "return to realism," in the words of Gordon Moffat, the director general of Eurofer, the European steel industry association.

The group added that it was "relieved by today's decision of the European Commission not to propose a unilateral EU move from -20 percent to -30 percent."

Eurochambres, the European chamber of commerce, had a better sense of the tug-of-war when it said that it was "alarmed" at the commission analysis but "welcomed" the re-iteration that conditions still apply for the EU to move to the higher cut.

While economic conditions have developed for the worse since the EU first made its 20/30 percent offer in 2007, the science of climate change has also developed.

Earlier analyses that suggested cuts of between 25 and 40 percent on 1990 levels by 2020 on the part of developed countries would be enough to keep the average global temperature increase below two degrees - the cut-off point for catastrophic climate change - scientists now say the upper end of that scale will be necessary to meet that same goal.

But such a shift, from a unilateral 20-percent cut and conditional 30-percent cut, to a unilateral 30 percent cut and a conditional 40 percent cut will not be part of the EU's new debate, according to Ms Hedegaard.

"It makes no sense to discuss 40 percent if we are still discussing 30 percent. We should not bash each other with percentages," she told reporters.