Paul Harrington Yahoo News 12 Dec 08;
BRUSSELS (AFP) – European Union leaders looked poised Thursday to seal agreement on a package to fight global warming after concessions to nations concerned over the cost to industry during recession.
Italy's Silvio Berlusconi, one of the fiercest opponents of the proposals that had been on the table, withdrew his veto threat after several hours of negotiations as sources at an EU summit said a consensus was now emerging.
"We are heading for a compromise," the Italian prime minister told reporters on the margins of an EU summit in Brussels. "Italy is on the way to getting all it wants."
Diplomatic and EU sources had earlier said that French President Nicolas Sarkozy, the summit's host, had made a series of compromises designed to buy off opposition by countries including Italy, Poland and Hungary.
Although Britain and others had voiced concerns that too many concessions had been made, hopes grew that an agreement would be reached before the end of the two-day summit on Friday.
"A consensus is starting to emerge and an agreement is quite probable tomorrow," one EU official said on the condition of the anonymity.
The EU's so-called 20-20-20 plan sets three targets for 2020: a 20 percent cut in greenhouse gas emissions, a 20 percent cut in energy consumed and 20 percent use of renewable energy.
But several nations, led by Germany, Italy and Poland, have opposed the plans to achieve those targets, fearing the effect on their industries and jobs in a time of recession.
German Chancellor Angela Merkel, had said earlier in the week that she would not endorse any deal that jeopardised German investment or jobs with the continent's biggest economy now in recession.
But Merkel, who was the initial package's chief architect before Germany became affected by the global economic slowdown, merely said on arrival that she expected "difficult negotiations" in the hours ahead.
Poland and its fellow eastern European nations are seeking special treatment as they are heavily reliant on high-polluting coal for their energy.
The fresh proposals suggested a new mechanism for sharing out CO2 quotas, with Poland and Romania getting a special allocation of 12 percent against the previously suggested 10 percent.
The energy sectors of heavily coal-dependent nations would also receive some free emissions allowances until 2019 under the plan.
A Polish government source said that Warsaw was now happy with the package on offer.
Poland "has achieved all its objectives," the source said.
"Europe must not provide the spectacle of its own division," said Sarkozy before going into the closed-door meetings.
Environmental group Greenpeace swiftly slammed the new concessions.
"We risk a lock-in in an expensive and polluting fossil-fuel economy," said Greenpeace Europe director Joris den Blanken.
United Nations Secretary General Ban Ki-moon, attending UN climate talks in Poland, said the outcome of the two-day summit in Brussels holds "great consequences for the whole world".
"We look for leadership from the European Union," he said.
The EU hopes to come to international talks on global warming in Copenhagen next December with a strong, unified line on climate change as a model for the rest of the world.
Europe's overall objective is to keep global warming to two degrees centigrade above pre-industrial levels.
EU Leaders Mull Softer Climate Action Amid Crisis
Pete Harrison and Darren Ennis, PlanetArk 12 Dec 08;
BRUSSELS - European leaders sought to ease the shock for heavy industry on Thursday by watering down plans to tackle climate change in the midst of an economic crisis.
The European Union hopes to agree ways of cutting carbon dioxide to 20 percent below 1990 levels by 2020, heeding warnings of stormier weather and rising sea levels.
Having already struck deals in recent weeks to promote green energy and curb emissions from cars, the focus has switched to the most contentious issues -- power generators, heavy industry and manufacturing.
"We are going to get a historic decision," said Finnish foreign minister Alexander Stubb. "Europe is going to show the way on energy and climate change."
The talks assume a greater importance coming as they do just over a month before Barack Obama assumes the U.S. presidency. Many in Europe expect closer co-operation with an Obama administration on such issues as climate change than was achieved with incumbent George W. Bush.
Several leaders stressed the need to maintain the EU's ambitious targets, but German Chancellor Angela Merkel appeared to have secured an early win for industry.
Steel, cement, chemicals, paper and other industries will be sheltered from the added cost of buying permits to emit CO2 from the EU's flagship emissions trading scheme (ETS), according to a draft text that formed the basis for negotiations.
"This covers about 90 percent of industry, and I don't see any reason why Germany would not accept this proposal," German conservative Peter Liese told Reuters. "I see it as a victory."
But critics said that handing out pollution permits for free removed the main incentive for emissions cuts.
"Allocating such a large proportion of emissions permits for free...would turn the ETS into a windfall profit machine for Europe's most polluting industries," said Green group member Caroline Lucas.
SOLIDARITY
Merkel and Italian President Silvio Berlusconi have fought successfully in recent weeks to protect businesses and their powerful auto sectors. But Berlusconi still dangled the threat of vetoing any deal.
Once industry has been dealt with, negotiations will switch to bargaining with eastern European states over how much money they need to accept a deal that will punish their power sectors.
Proposals to make power generators pay for permits to pollute from 2013 are aimed at making the dirtiest plants uneconomical, but that has caused alarm in Poland, which gets over 90 percent of its power from highly polluting coal.
Poland's battle led to proposals in the draft that its power sector could be handed opt-outs, along with the power sectors of other big coal users, island nations and the Baltic states, which are poorly connected to the EU power grid.
But Germany created friction by countering that should be matched with free permits for its own new, cleaner coal plants.
Along with opt-outs, eastern European states are also demanding a boost to a 7.5 billion euros "solidarity fund" designed to help replace coal with green energy and nuclear.
Britain has so far put up stiff resistance to any further handouts, while Germany wants it to be part of EU budget talks.
"It's all at the expense of the western countries so it will be very difficult to negotiate an increase of even 1 percent," said a Bulgarian government official.
A successful deal this week is seen as vital to catalyze global talks on cutting greenhouse gases from other big emitters such as Russia, China, India and the United States.
"If we fail to reach an agreement at this summit, it will be disastrous for climate negotiations next year," said Danish Prime Minister Anders Fogh Rasmussen.
(Additional reporting by Anna Mudeva, Huw Jones, Ilona Wissenbach, Ingrid Melander and Marcin Grajewski)
