EU Climate Plan Further Disintegrates

by William Yeatman on October 8, 2008

The European Union’s promise to reduce its greenhouse gas emissions 20% by 2020 looks doubtful as member countries increasingly dilute their climate strategies to allay economic concerns.

Half the 2020 emissions reductions are supposed to come from the EU’s Emissions Trading Scheme (ETS), a continent-wide cap-and-trade scheme that would cover industrial users and suppliers of energy. The ETS occurs over three phases, but all the significant emissions cuts have been postponed until Phase Three, which starts in 2012. Yet phase three is already in dire straits, four years before it is set to begin. Two weeks ago, Germany, the EU’s largest economy, indicated that it will opt-out of phase 3 of the ETS, by granting heavy industry free carbon permits after 2013. In defending the policy, German Chancellor Angela Merkel said that she “could not support the destruction of German jobs through an ill-advised climate policy”.

In calling for industrial exemptions, Germany has been joined by Poland, which gets 95% of its electricity from coal. Hungary, the Czech Republic and the Slovak Republic have also expressed reservations about phase three of the ETS.

A major portion of the 2020 target would also derive from stringent fuel efficiency standards applied to all EU countries. This week, however, France proposed an auto emissions plan that both postpones and weakens the existing regulations. The French plan was hashed out with Germany over the summer, and it reflects the concerns of German’s powerful automaker lobby.

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