One of the issues that have caused a major rift between the US and the EU is now dividing EU commission members. The FT reported that Loyola de Palacio, EU commissioner for energy and transport, suggested that the EU should back away from the Kyoto protocol and look for alternative ways to reduce green house gas emissions while maintaining competitiveness in industry. After the US and Australia indicated that they will not join, the fate of the protocol rests on Russia which has been taking a long time to make a decision. Margo Wallstrom, EU environmental commissioner and architect of the protocol that allows individuals countries to trade on emissions targets, declared that she was undermining her efforts to get Russia to ratify the protocol.
I have attached three articles that have been published in the FT and the Irish Times that indicate that there may be underlying issues such as de Palacio’s interest in how the protocol could affect Spanish industry (her home country) as well as the concern that the EU is not provided a united front on this issue.
Energy chief challenges EU stance on Kyoto, Financial Times, Feb. 26, 2004
Prodi stands by EU Kyoto policy, Financial Times, Feb. 27, 2004
Prodi rejects talk of discarding Kyoto, Irish Times, Feb. 27, 2004
Financial Times (London, England)
February 26, 2004 Thursday
SECTION: INTERNATIONAL ECONOMY;
Energy chief challenges EU stance on Kyoto
BYLINE: By TOBIAS BUCK
Loyola de Palacio, the European Union commissioner for transport and energy, has openly challenged the European Union's commitment to the Kyoto protocol, arguing that plans to implement cuts in greenhouse gas emissions pose a severe threat to European industry.
Though she said she supported the Kyoto target of reducing greenhouse gas emissions in the EU by 8 per cent between 2008 and 2012, Ms de Palacio told the FT that the Union should explore alternative ways of meeting that goal.
In her most trenchant comments on the issue to date, Ms de Palacio asked: "Should we maintain our position or not? Maybe there are no alternatives. But I think there are alternatives.
"We should look at other ways of achieving our goal - to reduce emissions - while maintaining the competitiveness of our industry."
Ms de Palacio's latest intervention represents a provocative break with the Commission's agreed position and is certain to increase tensions between her and Margot Wallstrom, the environment commissioner.
Ms Wallstrom is the architect of the legislative package that seeks to implement the emission cuts through an emission trading scheme based on individual national reduction targets.
Ms Wallstrom has complained repeatedly that Ms de Palacio is underming her efforts to get countries such as Russia to ratify the protocol and has labelled her "disloyal". Such open criticism is extremely rare among Commissioners, who generally seek to present a united front on crucial policy issues.
But Ms de Palacio insisted that she had the right to speak her mind. "I cannot shut up when confronted with a big problem, especially one that falls into my direct responsibility. Energy is my responsibility."
Ms de Palacio's comments are also certain to infuriate environmental groups, which look to the EU as one of the last bastions of support for the Kyoto protocol. However, she is likely to be backed by many European businesses, some of which have already threatened to abandon the EU if forced to implement strict emission-reduction targets.
The US and Australia have already made clear that they will not apply the Kyoto protocol, which also does not bind emerging economies such as China and India.
The protocol can now come into effect only if Russia agrees to ratify it, and its reluctance to do so until now is one of the prime reasons for Ms de Palacio's decision.
"Unhappily, it looks as if the Russians are not going to ratify. This is something that needs to be addressed," she said. Ms de Palacio would not comment on what alternative approach she had in mind for implementing the Kyoto targets, insisting that she merely wanted to stimulate a debate.
But she pointed out that there were always two ways of achieving a goal: "You can punish and threaten or you can give incentives."
She said her calls for a rethink had won the support of a growing number of EU member states: "Several ministers from different countries, both from northern and southern Europe, have told me in private that they have great concerns.
"And this concern is growing and growing."
Financial Times (London, England)
February 27, 2004 Friday
London Edition 1
SECTION: INTERNATIONAL ECONOMY; Pg. 11
HEADLINE: Prodi stands by EU Kyoto policy
BYLINE: By TOBIAS BUCK
The European Commission sought yesterday to paper over the cracks that have emerged in its position on implementing the Kyoto protocol, after one of its members said the European Union should think about different ways to achieve its target for reducing greenhouse gas emissions.
In a statement by Romano Prodi, Commission president, the Brussels-based executive said it "strongly rejects all calls to change its position concerning the ratification of the Kyoto protocol and its full implementation by the European Union".
The move followed comments by Loyola de Palacio, the Commission vice-president in charge of energy and transport, in an interview with the FT in which she called for a rethink on the EU approach to implementing the protocol.
Though she insisted that the EU should keep to its target of lowering greenhouse gas emissions by 8 per cent between 2008 and 2012, she called for a debate over whether there were better ways of reaching that goal.
She pointed out that Russia was unlikely to ratify the protocol, which would mean the agreement would not come into force. "This is something that needs to be addressed," Ms de Palacio said, pointing out that the reductions were likely to dent the competitiveness of European industry.
Her comments represent a challenge to EU legislation that seeks to achieve the reductions in greenhouse gas emissions through an emissions trading system based on national reductions targets.
People close to Margot Wallstrom, the environment commissioner and architect of that legislation, yesterday expressed their anger at Ms de Palacio, saying the energy commissioner was "damaging the EU's standing".
"De Palacio has undermined the Commission's position," one person close to Ms Wallstrom said. "She is a commissioner and she has to stand behind Commission decisions."
However, Ms de Palacio reiterated her concerns at a press conference in Madrid yesterday. According to Reuters, she said the EU should give Russia until 2005 at the latest to ratify the protocol.
If Moscow failed to do so, the EU should reconsider its proposed emissions trading scheme, Ms de Palacio added.
The Irish Times
February 27, 2004
SECTION: CITY EDITION; BUSINESS AND FINANCE; Pg. 51
Prodi rejects talk of discarding Kyoto
BYLINE: By TIM KING
The President of the European Commission, Mr Romano Prodi, yesterday rejected "all calls" to abandon the Kyoto Protocol, which aims to cut greenhouse gas emissions. His declaration was forced by an interview given by Commission vice-president Ms Loyola de Palacio in which she suggested that the EU should find alternatives to Kyoto for fear of damaging the competitiveness of European industry.
"We cannot and we will not back down in the fight against human-induced climate change," Mr Prodi said in an attempt to re-establish the Commission's position.
The comments from his energy commissioner directly contradicted the stance long held by the Commission and the majority of EU states, but they reflect growing concern in Ms de Palacio's home country about how Spanish industry may be affected.
EU states have until the end of March to submit their national plans for allocating licences for emissions of carbon dioxide.
The Republic published its plans this week. Although Kyoto will not enter into force unless and until Russia ratifies the protocol, the European Environment Commissioner, Mrs Margot Wallstrom, maintains that the EU should press ahead with emissions trading on the terms laid down at Kyoto.
Posted by Michael Asefa at March 2, 2004 12:35 PM