EU ‘pollution-for-sale’ bid to woo Bush

Date: 28/06/01

By Laurence Frost

THE European Commission is pushing plans which would let companies buy and sell the right to pollute in an attempt to persuade the US to reverse its decision not to ratify the Kyoto treaty.

Environment Commissioner Margot Wallström is hoping to persuade colleagues to adopt her draft directive on 'emissions trading' in time for next month's resumption of the international 'COP6' talks on the global warming treaty in Bonn (16-27 July)."We want to influence the debate in the US as much as possible," said Jos Delbeke, head of the Commission's climate change unit.

The EU was opposed to emissions trading during the 1997 negotiations on Kyoto, agreeing to it only as part of the final deal on Washington's insistence.

Now the Commission hopes that by embracing the market-based measure it will encourage President Bush to reconsider his refusal to ratify the treaty, a move which has cast his administration as the world's environmental pariah. "Coming forward with a trading proposal is not only useful for ourselves, it will encourage the US and others to go for Kyoto," said Delbeke. But the accelerated timetable for emissions trading could meet resistance from EU industry chief Erkki Liikanen.

Sources close to the Commissioner say he is concerned that European industries have not been consulted enough, although he supports emissions trading in principle.

The draft framework directive would establish trading in the main greenhouse gas, carbon dioxide (CO2), by the start of 2005.

It covers an estimated 5,000 energy-intensive installations across the Union - including power plants, oil refineries, paper mills and furnaces - together accounting for 40% of total emissions.

Individual countries would be allowed to apply the scheme to other sectors. Firms would have to stick within their government-allocated limits or buy extra rights from other companies. Failure to comply would result in fines of €200 per extra tonne emitted.

The proposal is designed to increase pressure on the US administration at a time when Bush is likely to face renewed international criticism over his claim that the Kyoto accord lets developing countries 'off the hook'.

The bid to bring the US back on board comes as a major international science foundation prepares to unveil evidence that global warming will slash food production in the poorest countries, while increasing it in the developed world.

A week before the start of COP6 talks, the International Institute of Applied Systems Analysis (IIASA) will present its research into the global effects of climate change.

Mahendra Shah, a former World Bank economist, will tell a climate change conference in Amsterdam on 10 July that developed countries stand to gain in agricultural yield and productive land acreage with global warming, particularly in the north. "Global warming is the result of what we have been pushing into the air over the past 30 years," said Shah. "Developing countries have contributed little to global warming, but they will bear the brunt of it."

Asia, sub-Saharan Africa and South America are predicted to be the major losers over the next 80 years, with the 40 worst-hit countries - where 450 million people are already undernourished thanks to a shortfall of 15 billion tonnes of crops - set to lose a further 33 billion tonnes of production.

The European Commission is pushing plans which would let companies buy and sell the right to pollute in an attempt to persuade the US to reverse its decision not to ratify the Kyoto treaty.