New EU states team up against parts of climate plan
05 Nov 2008 18:15:10 GMT Source: Reuters
By Gabriela Baczynska WARSAW, Nov 5 (Reuters) - Seven eastern members of the European Union on Wednesday upheld a joint stand against parts of the bloc's climate package, which they fear could harm their economies, their leaders said. Poland, Hungary, Slovakia, Estonia, Lithuania, Latvia and the Czech Republic, which became EU members in 2004, met in Warsaw to discuss further cooperation on the climate plan, which aims to curb emissions of greenhouse gas carbon dioxide (CO2). "We want to continue our cooperation and jointly stand for solutions enabling us to accept the package," Poland's Prime Minister Donald Tusk told a news conference after the meeting. The countries worry the package, which must be approved by a unanimous vote at an EU summit in December, would worsen an economic slowdown expected in the region due to the global financial crisis. Tusk also said he got backing for a proposal Poland made in Brussels on Tuesday for upper and lower limits to be imposed on the price of permits to emit CO2 -- a "price corridor" -- under the EU's Emissions Trading Scheme (ETS), the flagship of the bloc's efforts to combat global warming. "We agreed the price corridor is very important. Many countries (...) have currently suffered speculative attacks on their currencies. Imagine what would happen if the CO2 auctioning system was attacked," Tusk said. The Polish proposal is controversial, however, and many policymakers and traders are likely to oppose the plan as introducing excessive political interference into the trading scheme, which may then start to appear more like a carbon tax. The ETS accounts for more than 40 percent of total EU emissions, and imposes on industry a fixed carbon quota which it reduces over time as a way to combat climate change. The scheme allocates emissions permits which companies can buy or sell according to how clean and efficient they are, creating a carbon price that moves according to demand. At present companies in the ETS get some permits for free. The EU is now reviewing the design of the ETS from 2013, and Poland fears plans to make power generators pay for every tonne of carbon dioxide (CO2) emissions will create heavy costs for its highly polluting coal-fired power plants. The seven states mostly oppose introducing full auctioning of emissions permits for utilities as of 2013. Poland, which wants a more gradual move to full auctioning, had said it may veto the package if its demands are not met. DON'T WANT TO VETO "We don't want to block or veto anything really and we hope we will be able to agree it in the end," said Czech Prime Minister Mirek Topolanek. Poland also said it proposed another mechanism that would make the climate package acceptable for the coal-based economy. The "specific fuel benchmarking-auctioning" would set free emission quotas for producing a certain amount of energy that would equal the emissions by the most clean and technologically advanced energy producer from a certain source. Other utilities would only have to buy permits to cover the difference between this set amount and their real emissions. Some diplomats say the countries could be offered cash to upgrade their power plants in exchange for accepting the plan. French President Nicolas Sarkozy has made clinching the climate accord in December one of the French EU presidency's top priorities and many analysts say he may be open to concessions. Tusk, who also has some reasons to seek a compromise, said earlier this week he will meet Sarkozy before the December summit to make sure the agreement is safeguarded. (Editing by Anthony Barker)
Polish Prime Minister Donald Tusk (R) shakes hands with Czech Republic's Prime Minister Mirek Topolanek prior to the meeting of the Visegrad group in Warsaw November 5, 2008. REUTERS/Peter Andrews (POLAND) ...
