The European Union s industry commissioner has urged the 25-nation bloc to set a "realistic unilateral" target for cutting carbon dioxide (CO2) emissions by 2020 and offer to go further if other nations join the drive. In a letter seen by Reuters on Friday, European Commission Vice-President Guenter Verheugen said the EU should also agree legally binding goals to increase renewable energy and bring cars for the first time into its emissions trading scheme.

But he warned in the letter to Commission President Jose Manuel Barroso against damaging Europe s drive to boost growth and jobs by setting too ambitious short-term targets that could damage economic competitiveness. The proposals by the German commissioner, regarded as the manufacturing industry's strongest advocate in the EU executive, signal a brewing debate in the Brussels body about how "green" an energy policy review due in January should be. "We need to propose a realistic unilateral target for 2020, which we would further strengthen if other countries also commit to substantial actions to fight climate change," Verheugen said.

Caps on greenhouse gases under the Kyoto Protocol only go through 2012, and the EU is leading a drive to get other big nations to commit to cuts in the period after that. But the approach of agreeing a single international target for cutting emissions had failed to provide an incentive for other big polluters such as the United States and China to play along in the battle against global warming, Verheugen argued.

President George W. Bush pulled the United States out of Kyoto in 2001, saying caps would cost jobs and the plan wrongly omitted targets for poor countries.

Expensive

Verheugen cautioned that what he called unrealistic targets could be hugely expensive and make European business less globally competitive. "The tentative empirical work undertaken by my services suggests that 2020 unilateral targets of more than 15 percent off 1990 levels could imply significant costs," he wrote.

"Targets between 10 and 15 percent would already imply electricity price increases in Europe of some 10 percent and prices of CO2 of up to 30 euros per tonne." The letter appeared to point to numbers under discussion in the Commission.

Verheugen did not explain how cars could be included in the complex emissions trading scheme (ETS), which now covers less than half of total EU emissions, mainly in electricity generation and heavily polluting industries. Under the scheme, limits are set on the amount of CO2 that factories can release, forcing companies to buy emissions permits if they exceed their cap.

"We need to extend the (emissions trading) system to bring in other sectors -- e.g. cars -- as well as other gases. There is no justification for excluding these from the ETS -- we must avoid the proliferation of stand-alone schemes or alternative outdated "command and control" approaches," he said.

His embrace of the idea may be aimed at forestalling the declared intention of Environment Minister Stavros Dimas to propose binding legislation to make the automobile industry respect emissions norms for cars, which have so far been voluntary and not fully achieved.

Verheugen also called for an active industrial policy to make Europe the frontrunner in environmental industries while giving energy-intensive companies facing global competition a transition period to reduce their emissions.

(Por Paul Taylor , Planet Ark, 27/11/2006)

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