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Both EU member states and the European Parliament agreed in December upon legislation to combat climate change, but critics claim that the compromise deal contains too many loopholes.
The package upholds the 20-20-20 targets proposed by the European Commission for 2020: a 20-percent reduction in greenhouse gas emissions from 1990 levels; increasing the share of renewables in the EU’s energy mix to 20 percent from 8.5 percent today; and a 20-percent cut in energy use through improved energy efficiency.
The European Emissions Trading Scheme (ETS) will serve as a key tool for achieving the greenhouse gas reduction target. Under the system, emission allowances will be auctioned to polluting industries. The original plan was to require them to pay for the totality of their emission rights by 2020, but this goal was watered down to 70 percent, with full auctioning now envisaged for 2027. The interim target for 2013 is just 20 percent.
Power-generation plants were slated to buy all their permits by 2013. That still holds in principle, but special ‘transitional free allowances’ are now available to power companies in Eastern European countries heavily dependent on coal, such as Poland, which had threatened to veto the deal.
Pressure from Western countries concerned by potential job losses due to the financial downturn, especially Germany and Italy, also contributed to a less ambitious agreement than some had hoped for. The most energy-intensive industries - such as steel, cement and chemical producers - will continue to get the lion’s share of their emissions permits for free if they invest in the ‘best available’ technology. The rationale for this lenience is that companies in these sectors are subject to ‘carbon leakage’, i.e. they may relocate production if competition from manufacturers in countries with less stringent climate change policies gets too tough.
By 2020, at least 10 percent of transport fuel in all member states must come from renewables, such as biofuels, hydrogen, ‘green’ electricity and the like. Biofuels should achieve at least a 35-percent cut in carbon emissions compared to fossil fuels by 2011, although producers already in operation will have until 1 April 2013 to comply.
Instead of being required to earmark half of their auction revenue to an international fund to assist developing countries that participate in a post-Kyoto agreement in reducing greenhouse emissions and adapting to climate change (as the parliament’s environment committee had proposed), governments should now use half the money on ‘measures to combat climate change’ more generally. In addition, the revamped ETS will allow companies to use offset credits from outside Europe.
While EU officials and politicians rejoiced over a ‘historic’ agreement that would put Europe on a path to a low carbon economy and serve as an example to others, green euro-parliamentarian Caroline Lucas wrote in The Guardian that a 20-percent emissions reduction target by 2020 was “far too little too late and, scandalously, around two-thirds of the emissions reduction could be outsourced to developing countries.” This would allow the EU to “cherry-pick the cheapest climate mitigation potential in developing countries” while turning the ETS “into a windfall profit machine for Europe’s most polluting industries.”
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