EU Parliament backs climate plan - October 08, 2008
Posted for Quirin Schiermeier and cross-posted from Climate Feedback
The European Parliament’s environment committee yesterday voted largely in favour of the ambitious European climate action plan (subscription) proposed in January.
The decision, although preliminary, allows the European Union (EU) to go into the upcoming next round of international climate negotiations with a common goal of reducing greenhouse gas emissions across Europe by at least 20 % by 2020. The European commission, Council and Parliament must yet formally agree on details of the plan, but substantial changes are now considered unlikely.
Most hotly contested were the amendments to the EU’s emission trading system (ETS) which the European commission had proposed in January to strengthen the effectiveness of the scheme.
Introduced in 2005, the ETS is as yet the only mandatory emissions trading system in the world. Until now, power stations and other large European industries have benefitted from generous supply of free permits to release carbon dioxide. Much of the commission’s proposed reform was aimed to end the over-allocation of emission allowances.
The compromise now agreed upon in parliament doesn’t pull the teeth out of the original plan. As of 2013, power stations will not receive free emission allowances anymore. Instead, they will have to obtain 100% of allowances at auction.
Other energy-intensive industries, such as steel and cement facilities which, unlike the power sector, have to compete with suppliers outside the EU, will in a first phase merely have to obtain 15% (rather than 20 % as the commission had initially proposed) of emission allowances at auction. But the allocation of free allowances to manufacturing industries is to be gradually phased out by 2020.
The environment committee did make some concessions to industry, though. The threshold for facilities – currently around 10,000 - which participate in the ETS is to be raised from 10,000 to 25,000 tonnes of annual carbon dioxide emissions.
Fearing billions in additional costs and possible ‘carbon leakage’ to third countries with less stringent rules, Europe’s iron and steel industries had called on EU decision makers to completely exempt the manufacturing sector from auctioning until a new international climate agreement is in force. The compromise foresees that industries particularly exposed to international competition might still become eligible for 100 % free emissions allowances, but the sectors to be exempted will only be identified after the international climate summit in Copenhagen in December 2009.
“Europe will face a tough burden in the internal market, while America and China's industry will enjoy a light regime. This is going to cost us jobs," Karl-Heinz Florenz, a Christian Democrat German parliamentarian was quoted as saying.
But the EU environment commissioner Stavros Dimas noted with relief that the commission’s initial plan was not substantially watered down.
"We strongly appreciate the speed with which the Parliament is dealing with this important package,” Dimas said in a statement. "It is important that the committee, while approving a range of amendments, has voted to keep the broad architecture of our proposals unchanged. It takes us closer to our goal of reaching a final agreement between the Parliament and Council in December so that the EU can take this to the UN climate conference in Poznan, Poland."
Image: Power plants in Europe will no longer receive free allowances for their greenhouse-gas emissions.TRAVELPIX/GETTY
Comments
What I'd like to see in the implementation of this, is for there to be a reserve price at the auctions (of at least €45) to give investors some confidence that clean energy will be more profitable than, coal, for example. This would massively help Poland, esp if some of the revenue could be directed their way to support a difficult transition given their dependence on coal.
In the UK, the revenue, about £5.5bn/yr at first, could be used to simplify and reduce taxation on employment, which would help with the labour intensive jobs of adapting other aspects of our lives, such as needing more manual labour on farms.
Posted by: Neale | October 9, 2008 11:32 PM