European leaders pass climate "credibility test   

2678, 12/12/08

EU heads of state and government reached a unanimous agreement on Friday on plans to reduce EU greenhouse gas emissions by 20 per cent by 2020.  French president Nicolas Sarkozy described the move as "historic". "You will not find another continent in this world that has given itself such binding rules", Mr Sarkozy said after a summit in Brussels. 

There had been fears that countries concerned about the potential cost of the climate and energy package to their economies would reject a deal (EED 11/12/08 http://www.endseuropedaily.com/articles/index.cfm?action=article&ref=26771). But the French president said negotiations "turned out to be much easier than people said". 

Concessions were made to states that had expressed worries about the economic impact of the new rules.  All firms in the EU's emission trading scheme (ETS) will get at least 30 per cent of their carbon allowances for free until at least 2020, leaders decided. Some power plants will get a proportion of free allowances until the same date.  

But the EU's basic 20-20-20 targets remained unchanged.  More carbon auction revenue was earmarked to help eastern European economies and to fund carbon capture and storage (CCS), and generous access to foreign carbon credits was agreed (see details in separate article, this issue).

European commission president Jose Manuel Barroso said the EU had "passed its credibility test" on climate change and predicted that MEPs would back the deal when they meet in Strasbourg next week for their final plenary meeting of the year.

But not all MEPs were impressed.  Luxembourg Green Claude Turmes said a "free-for-all" approach had "shamefully torn EU emissions reduction legislation to shreds". He urged the parliament's negotiators to "do their upmost to repair the damage", he added.

British Liberal Chris Davies applauded a decision to increase the number of carbon allowances set aside to fund CCS demonstration plants, but said the number was only the "bare minimum" to kick-start the commercial development of the technology.

European steel industry group Eurofer said conditions included in the concessions on free carbon allowances meant that only five per cent of installations in the sector would receive "fully 100 per cent of their needs".

Green groups called on MEPs to reject an agreement on national emission reduction targets for non-ETS sectors.  The limits agreed for the use of Kyoto protocol flexible mechanism credits would mean that two-thirds of member states' reduction efforts could be achieved by buying credits overseas instead of action at home, they argued.

Governments also endorsed a European commission economic recovery plan and a series of priority actions in which climate and energy measures feature strongly (EED 26/11/08 http://www.endseuropedaily.com/26661).  They backed an increase of E30bn in European investment bank funding for renewables and clean transport, and the creation of a financing mechanism called the "Marguerite fund" to boost investment in energy, climate change and infrastructure for 2020.

Leaders said they supported "for the member states that so wish", the possibility of applying reduced sales taxes for certain sectors and instructed finance ministers to "settle this issue" by March.  They also reaffirmed their support for the EU to cut climate emissions by 30 per cent by 2020 if other developed countries take on similar commitments.

Follow-up: EU council of ministers http://www.consilium.europa.eu/, tel: +32 2 281 6111, plus Sarkozy press conference

http://ceuweb.belbone.be/archivevideo.php?sessionno=2073&lang=EN (video file) and reactions from Mr Turmes

http://www.greens-efa.org/cms/pressreleases/dok/262/262220.eu_summit@en.htm, Liberal MEPs

http://www.alde.eu/details/news/european-council-delivers-on-three-fronts/ and environmental groups

http://www.foeeurope.org/press/2008/Dec12_Shame_on_EU_leaders.html.

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