Tough EU demands put global climate deal at risk[fr][de] 

The European Commission this week detailed plans to force industry in advanced emerging economies such as China to meet efficiency or other standards before they qualify for carbon offsets from cutting carbon emissions (EurActiv 25/02/09).

Commission officials want the new rules agreed upon at a major UN-led climate meeting this December in Copenhagen, which is meant to thrash out a new climate treaty to replace the Kyoto Protocol.

"We should agree by the end of this year the basic architecture," Commission official Peter Zapfel said on Wednesday. "We're talking about a mechanism we want up and running by 2013," he added, speaking at a carbon market conference held in Copenhagen.

That tight timetable and lack of any clear rules worries investors, especially given that December's climate meeting already faces huge challenges to get 190 countries to agree ambitious action to fight climate change.

"I must admit I'm starting to get frightened about the Copenhagen meeting," said Nick Campbell, chair of the climate working group at Europe's biggest business lobby group, BusinessEurope. "I wonder how this is going to come together," he said, referring to the lack of detail so far in the EU's plans.

"I get a headache just thinking about it," said Seb Walhain, head of environmental markets at Fortis Bank Netherlands.

Killing the CDM? 

At present under the Kyoto Protocol's clean development mechanism (CDM), developing countries earn carbon offsets if they implement projects that avoid greenhouse gas emissions, for example by installing wind or hydro power. Rich countries, and mostly the European Union, buy the offsets to help them meet their climate targets more cheaply.

The EU now wants entire industrial sectors in advanced developing countries such as China to meet certain efficiency or emissions standards first before earning credits. The idea will probably get US support as a way to impose more carbon costs on Chinese competitors.

But the plan has no formal support from developing countries yet. Some are likely to see the move as a back door to climate targets, which they reject as their economies expand.

As China is home to so many CDM projects, undermining its role could endager the health of the entire scheme.

China has so far earned most offsets under the CDM, and at present there is no certainty about how the proposed change would affect existing projects.

"What happens to these projects if the CDM is dead?," asked John Kilani, the UN official in charge of such market mechanisms under the Kyoto Protocol, speaking to Reuters on the fringes of the Point Carbon conference.

"No private investor goes in on the basis of such uncertainty. The way it's packaged has to ensure that the implications for existing projects are considered."

Commission officials said the EU had created most of the demand for carbon offsets so far and now wanted to increase that finance.

"Are we killing the CDM? What we're looking for is how can we scale up," Zapfel said.

US requested stricter climate targets

Meawhile, a high-level EU environmental delegation upped the pressure on the US during a visit to Washington on 15-17 March, saying America must step up its 2020 emissions reduction target beyond what President Obama has envisaged.

"It is evident that key developing countries such as China and India are waiting to see what the USA will do. It is thus extremely important that the USA not only shoulders a very good long-term obligation to reduce emissions by 80% by 2050, but that it also has an objective for 2020 that is more ambitious than the currently declared emission reduction at the level for 1990, which would mean a 14% reduction as opposed to now," Czech Environment Minister Martin Bursík, representing the EU Presidency during the meeting, stated upon his return to Brussels.

Bursík was accompanied to Washington by Swedish Environment Minister Andreas Carlgren, whose country will take over the rotating EU Presidency in July, and European Environment Commissioner Stavros Dimas. 

The group met with Todd Stern, the United States' chief climate negotiator, Senator John Kerry and Lisa Jackson, an administrator at the US Environmental Protection Agency.

"We are not saying everyone has to do 30%, but all need to do their fair share," Dimas said in Washington, pointing to the criteria EU has set for assessing the comparability of developed countries' efforts (EurActiv 27/02/09).

The EU and US do, however, see eye-to-eye on long-term targets, agreeing that developed countries should reduce their emissions by 80% by 2050.

(EurActiv with Reuters)

Environment Commissioner Stavros Dimas reminded environmental experts in Washington that the EU is committed to cutting its own emissions by 30% only if other developed nations make "comparable reductions and more advanced developing countries take appropriate action". 

"Without this leadership by developed countries, we will not get the second crucial element, namely action by developing countries, particularly the emerging economies. I know the United States agrees with Europe on the importance of this," he said.

Czech Environment Minister Martin Bursík said the EU wanted to hear "a clear statement" from other industrialised countries as to their medium-term greenhouse gas emission reduction obligations until 2020, in line with Europe's commitment to 30% provided that others join in. "This obligation must be an emission reduction of between 25% and 40%. Otherwise, as indicated by data from the Intergovernmental Panel on Climate Change (IPCC), it will not be possible to stabilise global temperatures below the two-degree growth mark by 2100," he said.

Elise Ford, head of Oxfam International's EU office, argued that European leaders needed to agree on substantial assistance to poor countries and push for bolder emissions cuts in rich countries if they wanted to secure an effective global climate deal this year. "Squabbles with the US over the extent to which rich countries should inject money into their own economies should not be allowed to disguise the pressing need for the EU to promote an immediate stimulus package for poor countries," she said.

Commenting on the EU's plans to strengthen carbon offset criteria in Copenhagen, Nick Campbell, chair of the climate working group at BusinessEurope, said: "For me, it's a jump in the dark with a negotiating position, to see what the pushback is. Is it time to cut the CDM off at its knees? Particularly in the current situation, we really need the rules best understood by business."