Eastern European Leaders Say EU Must Ease Climate Targets Due to Economic Crisis

October 15, 2008 | Jesse Jenkins,

In yet another sign of the political challenges carbon pricing faces in times of economic insecurity, AP reports that leaders from eight Eastern European countries are calling on the European Union to ease up on greenhouse gas reduction targets under the EU's cap and trade program, arguing that it would be too much of a burden on their nation's already stressed economies.

Since all 27 EU member nations must approve a proposal for it to become law, the eight European nations could derail efforts to enact the next phase of the EU's Emissions Trading System. If the EU can't bring these eight nations back to the table, forcing the Europeans to back off on their emissions reduction program, it could be a major blow to the United Nations climate talks scheduled to continue in December in Poland.

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E. European nations want climate package changes
By ROBERT WIELAARD, Associated Press Writer

BRUSSELS, Belgium - Eastern European leaders pushed for changes to a EU climate package at the opening of a two-day summit Wednesday, saying it would be too much of a burden on their economies to make further cuts to greenhouse gas emissions.

The leaders of eight Eastern European countries said the EU must balance the wish for cleaner air against "the need for sustainable economic growth" at a time of "serious economic and financial uncertainties."

The countries -- Poland, Hungary, Romania, Bulgaria, Slovakia, Latvia, Lithuania and Estonia -- released a joint statement on the issue.

The recent financial turmoil has triggered fears of a global recession that would make governments less keen to get major polluters such as energy generators, steel makers and cement producers to pay billions into a cap-and-trade emissions scheme.

The EU cap-and-trade program could impose euro50 billion (US$68.8 billion) a year in polluter fees. Each of the bloc's 27 governments, including the eight Eastern European countries, and the European Parliament need to approve the plan for it to become law.

Over the past year, negotiations on the package between EU governments and lawmakers have intensified. It is hoped both sides can endorse it by year's end so that it can be enacted in 2009.

"We can't say we'll get an agreement by the end of the year if our conditions are not met," said Mikolaj Dowgielewicz, Poland's European affairs ministers. But Irish Foreign Minister Micheal Martin said the plan on the table now "represents the best possible compromise" and should not be radically altered.

If the EU backs off, it would be seen as a harsh blow to U.N. climate change talks planned for December in Poland that will include delegates from more than 190 countries. The conference will work out the details of a climate change accord to succeed the Kyoto Protocol, which expires in 2012.

The Eastern European leaders said their economies have made great cuts in carbon emissions since emerging from communism in the late 1980s and that "should be recognized" now.

If not, they said Eastern European nations will pay disproportionately toward an EU climate change package agreed to in 2007 that calls for a slashing of greenhouse gas emissions and creating a costly emissions trading program.

"Europe has been built on the principles of cooperation and solidarity," they said, adding the EU's climate change package can only work if it fosters "economic development for all member states."

Their plea echoed misgivings in Germany and Italy about forging ahead with the ambitious climate change package at a time of financial turmoil and declining economic growth.

Several leaders, however, said the package must not be mothballed.

"I think we should stick to the main objectives" of the climate change package that the EU leaders endorsed a year ago, Luxembourg Prime Minister Jean-Claude Juncker said.

British Prime Minister Gordon Brown said "this is not the time to abandon a climate change agenda."

Ernest-Antoine Seilliere, president of BusinessEurope, which represents 20 million small, medium and large companies, warned EU leaders to take into account the costs involved amid the financial turmoil that threatens to plunge Europe into recession.

The lobby group is worried the extra burden of the fees plus the economic uncertainty will make European industry unable to compete in the global market.

"We support the need to maintain competitiveness in Europe, its an important subject that has to be taken into account when any European package is implemented to reduce CO2 emissions," he said.