EU leaders try to agree on green energy

EU leaders are meeting in Brussels later this evening. The agenda was supposed to be all about the green energy/climate change package which the French Presidency is trying to get an agreement reached by the end of the year. But with the worsening economic crisis much of their discussion focused on agreeing a financial rescue package. At the same time, however, it has also brought to the fore the growing disunity over the climate change package with all sorts of splits and disagreements emerging as to the economic costs of meeting the EU’s climate change targets – cutting greenhouse gas emissions by 20%, boosting renewables and energy efficiency by 20% and all by 2020 - and the impact this could have on the competitiveness of European industry.

Underlying these splits remains the key issue of how to reconcile competing economic goals with those of the environment and at the same time ensuring sustainable economic growth.

Germany, Poland, Italy and some of the other member states are concerned about the actual distribution of the emissions targets among EU countries within the ETS and want to see greater flexibility. Italy and Poland want to see the power sector buying the right to emit greenhouse gases by auction from 2020 and not 2013 as proposed by the Commission. Poland, together with Bulgaria, Latvia, Lithuania, Romania, Estonia, Hungary and Slovakia also think their targets are unfair and unrealistic to meet since 2005 is used as the baseline year for setting new emissions targets and they would rather those from 1990, which underpin the Kyoto Protocol, were used instead.

The French Presidency has already proposed a compromise under which the member states would agree next year on how to determine which energy intensive industries could receive free C02 emissions allowances within the EU ETS to protect them from competition by producers operating in other countries where there are no measures for tackling climate change (the so-called issue of carbon leakage). The Commission had originally said it would draw up a list of criteria for identifying those sectors that could benefit from 100% free EU ETS allowances depending on whether their competitiveness is at risk or not only after an international agreement had been reached in Copenhagen. Both the Commission and the Parliament do not want this list to be finalised until after the international climate change agreement is reached next December given the need to ensure a strong EU negotiating mandate.

With Poland and Italy now threatening to veto the climate change package and others trying to water down the package, the trouble is the kind of signal this sends out to the rest of the world, especially in the run-up to the UN climate change negotiations for a new international agreement in Copenhagen in December 2009 where the credibility of the EU could be at stake if it cannot reach a joint negotiating position beforehand or maintain its leadership role.

Of course if Scotland was independent not only would we be sitting at the top table able to support the need for strong and concerted action in tackling climate change (with our own target of reducing greenhouse gas emissions by 80% by 2050) but Scotland, like Denmark, would also be ideally placed to host the next UN international climate change conference – leading the way by example.

Our Annual Party Conference begins in Perth tomorrow so I’m heading back tonight from Brussels.