EU Climate Plan Cut to Shreds

by William Yeatman on December 15, 2008

The European Union held negotiations this week to finalize the third and final phase of the EU Emissions Trading Scheme (EU ETS). The first two phases of the EU’s cap-and-trade program were turned into boondoggles by influential business lobbies, according to a recent article in the New York Times.

Industry lobbyists again triumphed this week in Brussels. Coal-fired power plants in East and Central European countries won the right to a delayed payment schedule for emissions credits. German industry won the right to future concessions if a study deems that the EU ETS renders them less competitive on the global market. Although it was never entirely clear what Italy wanted (some believed that the Italian delegation threatened to veto the package to win concessions for the Italian car industry in upcoming negotiations), Italian Prime Minister Silvio Berlusconi told AFP that "Italy is on the way to getting all it wants.” The gutted agreement infuriated environmentalists.

This was a predictable result. Almost two years ago, CEI president Fred Smith testified before the U. S. Senate Environment and Public Works Committee and warned that  cap-and-trade is a lobbyists’ dream, because its complexity creates ample space to negotiate concessions for individual companies. 

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