Irish EU Presidency To Privatise Pollution Rights: Cullen Gives 'Carte Blanche' to Irish Industry

international | eu | feature Sunday February 08, 2004 12:44 by vlo

Irish Presidency to settle deal on European CO2 Emissions Trading Market

From the Newswire: 'One of the central, but not well known, direct goals of the Irish EU Presidency is to reach agreement with the European Parliament about the CO2 Emissions Trading Market. This market is to be launched in 2005. Ministers of the EU member states are demanding a market full of loopholes, so that companies can escape reducing CO2 and other greenhouse gases on EU territory. Instead companies will be able to produce and trade the commodity “the right to pollute” by financing cheap efficiency projects in Eastern Europe and in the South.

An agreement between the EU Member States and the European Parliament should finally be reached at the end of June, but ideally should come about before the last legislative session of the European Parliament in April, before the elections. Ireland already held a conference in Dublin on February 3 to discuss the various National Allocations Plans among the Member States. These allocation plans are the foundation of privatising the right to pollute among companies in the EU, concerning high-polluting industries such as the steel and paper industries. Before the end of March, all Member States should have finished their allocation plans.

The most crucial topic will be on the loopholes that will be provided to companies. Last year, the European Commission proposed to link the European Market with other “flexible mechanisms” for reaching reduction targets, such as the CDM and JI mechanisms, that make it possible for Member States and companies to create the right to pollute with CO₂ in the EU, by developing or financing “climate projects” in other countries. The Commission however proposed to put a cap of 8 per cent on this. The EU Parliament agreed on this. In December, a majority of the EU-member states expressed the opinion that they want to get rid of this cap. Now, Member States and the EU Parliament have to come to an agreement so that the trading scheme can be implemented in January 2005.

This so-called “linking directive” will boost the European Market with cheap credits, so reaching the Kyoto-targets will be much cheaper for companies. States such as Spain (which is very energy inefficient), as well as most industries, are heavily engaged in lobbying the EU Parliament and other Member States to link the European market with these other flexible mechanisms. The consequences are that no reductions will have to be met in Europe itself, enabling industry and Member States to continue polluting anyway and further postponing solutions to climate change. Another consequence is that a very lucrative market will be created, by creating a new commodity and very flexible market rules.'

The Effects of this Wrangling in Ireland are Already Apparent: Government is Giving Industry what it Wants: Industry Plays while the Consumer Pays (Waste Charges)
Irish Taxpayer Funds Free Ride for CO2 Industries: Friends of the Irish Environment
Cullen Decision on Emissions Cowardly -SF
Cullen Ignoring Kyoto Targets -Labour
Greens say Government is allowing Industry ignore Kyoto Obligations

REMAINDER OF ORIGINAL CONTRIBUTION
Another issue is which type of projects will be approved. In the worst case scenario, nuclear power plants, large dams and industrial tree-plantations will be projects that can be developed for producing carbon credits, which then can be traded in the European Market. Parliamant is against these projects, but then again, several EU states are not. There might also be a future possibility of EU rules that contradict WTO universal trading rules, enabling supply-countries to bring the EU into Court for not accepting certain projects as a means for producing carbon credits.

Surprisingly maybe, it is a member of the Greens in the European Parliament who is proposing a new compromise. Alexander de Roo, member of the Dutch GreenLeft party, proposed to start linking from 2005 already, at the very start of the trading scheme, instead of 2008 as initially has been agreed between Commission and Parliament. He also is proposing not to wait for Russia to ratify the Kyoto Protocol, but to start next year anyway with the trading scheme. In response to the proposal, European Commission’s Catherine Day said: “We are optimistic we can reach agreement on the linking directive by the end of the Irish Presidency.”

It is common thought among members of EU-Parliament, the Irish presidency and analysts that there will be some trade-offs between this recent proposal and further demands of the member-states. De Roo his proposal is especially critical towards several types of projects, but less critical against a high cap on linking the flexible mechanisms with the proposed trading scheme.

Background Reading:
Electricity Industry wants unlimited use of CDM and JI in EU ETS
Irish Presidency hopeful to reach agreement on linking
EU emissions trading scheme could cause EU companies to go bankrupt or move overseas, - EU Energy Commissioner
How Global Warming May Cause the Next Ice Age
EU-Ministers Propose Yet Another Loophole in EU CO2- Emission Reduction Market
Debates and Actions around Climate Conference in Milan
"UN to allow GM-Trees for producing carbon credits"

More Useful Links:
Carbon Trade Watch
CDM Watch
Sinkswatch
Rising Tide
Rising Tide UK
Burning Planet