EU to stick with lower climate offer to U.N

Pete Harrison, Reuters 22 Jan 10;

BRUSSELS (Reuters) - The European Union will stick with its lowest offer for cutting carbon emissions under a U.N. climate accord, fulfilling the wishes of industry, a draft letter shows.

The 27-nation bloc has committed to unilaterally cut carbon dioxide to 20 percent below 1990 levels over the next decade.

Ahead of the U.N. climate talks in Copenhagen in December it offered to deepen those cuts to 30 percent if other rich countries made similar efforts.

That offer still stands, according to the draft letter to top U.N. climate official Yvo de Boer. But it is unlikely to be carried out because the Copenhagen talks ended with a weak deal.

Experts say the total cuts offered there by rich countries amount to no more than 18 percent and fall far short of the 25-40 percent that U.N. scientists outline as necessary to avert dangerous climate change.

The world is currently on track for temperatures to rise to 3.5 degrees Celsius above pre-industrial levels by the end of this century, which would bring catastrophic melting of ice sheets and rising seas, some scientists say.

But many EU countries and industries are wary of increasing cuts to 30 percent alone, because the cost of cutting emissions might put factories at a disadvantage to rivals in less regulated countries.

LEVERAGE

"After the Copenhagen failure, the EU would be foolish to again unilaterally increase its greenhouse gas objective," Gordon Moffat, the head of steel industry group Eurofer, said in a statement on Thursday. "Another 10 percent would be fatal."

But environmentalists say the EU is naive to think its conditional 30 percent offer creates any negotiating leverage and the bloc should move there anyway to set a moral example.

"Tackling climate negotiations with the same strategy as trade negotiations will simply get them bogged down like the current Doha round of trade talks," Greenpeace campaigner Joris den Blanken said.

Spain, which holds the EU's rotating presidency until July, drafted the letter, seen by Reuters, and will wait for feedback from all 27 EU nations before signing and sending it next week.

While participants in the EU's Emissions Trading Scheme, the bloc's main weapon against climate change, were worried that a 30 percent goal would raise the cost of carbon permits, analysts said the 20 percent target was largely priced into the market.

"Thirty percent is out of the picture for now," said Emmanuel Fages of Societe Generale. "Nobody was seriously attaching any probability to it post-Copenhagen."

At a meeting of EU ambassadors in Brussels on Thursday, a group of eastern European countries led by Poland joined Italy, Cyprus and Malta to call for the deletion of any reference to the 30 percent, even as a conditional offer, diplomats said.

Britain, Denmark, France and the Netherlands wanted the 30 percent offer to be prominent but to remain conditional.

(Additional reporting by Michael Szabo in London, editing by Anthony Barker)