(From Patrick Bell in Vienna)
It appears the E.U. may now be applying the brakes on its
climate and energy plan that was negotiated late last year. Expressing
concerns about the economic costs it might impose, Poland, Italy, and several
other E.U. member states are rebelling. European fans of more controls fear
that if the plan isn't solidified by late December, when the Czech Republic
gets the E.U. presidency, the whole thing might come apart. (The Czech
government is largely divided on climate change.) The E.U. Commission also
wants to have a strong plan in place to use as leverage with the next American
president.
Several vulnerabilities, meanwhile, are coming into focus with the E.U.'s cap
& trade system. For instance, mandating two policy targets (20% reduction of
emissions by 2020, and 20% increase of renewable energy use by 2020) may sound
good in theory, but under the current design of the E.U. system, these targets
may be contradictory in practice. Countries like Austria are meeting their
reduction target (cap) by importing credits from abroad (trade). The trouble
is, under this scheme, Austria, for example, actually sends valuable
investment dollars abroad that otherwise could be used for domestic renewable
energy projects, while not actually achieving reductions in its emissions.
And of course, not all industry sectors are covered, so there are plenty of
objections about favoritism.
