European Business Balks at 30% Carbon Cut

Some of the largest corporations in Europe have warned EU leaders against agreeing to an increase of the bloc's commitment to greenhouse gas reductions from 20 percent to 30 percent.

In an open letter addressed to Swedish Prime Minister Frederik Reinfeldt ahead of this week's European Council meeting (10-11 December), Business Europe—the lobby representing many of Europe's major industries and employers—said that offers on the table from other powers are not sufficient to warrant making the jump.

"The EU must not increase in any way its current unilateral 20 percent carbon reduction requirement," the group said in the letter, issued on Tuesday (8 December).

The EU has promised to increase its 20 percent commitment if other powers make similarly ambitious proposals.

The employers' federation said that this has not been achieved, pointing out the paucity of Washington's offer in particular.

"The US Congress proposal to reduce US emissions by 17 percent by 2020 compared to their 2005 levels only represents a three percent reduction from 1990 green gas emissions. Therefore, it cannot be considered an 'equivalent' effort justifying an EU move to a 30 percent reduction."

Business Europe said that further emissions reductions should be achieved via free trade and greater use of carbon offsets, the widely criticised method of "reductions" whereby others, usually in the third world, are paid to make CO2 cuts on behalf of rich donors which continue to pollute as before.

"Too little thought has been given to measures that harness the strength of free trade and the market economy to boost technological cooperation to fight against climate change," the business lobby said.

The confederation also drew a line in the sand over intellectual property in the global climate negotiations currently ongoing in Copenhagen, demanding a "robust system of intellectual property and investment protection" and saying that information-sharing between the global North and South should be via "readily available off-patent technologies."

Away from the spotlight of who is offering what in terms of CO2 cuts and cash to the developing world, the issue of technology transfer has emerged as a key sticking point.

Pool of knowledge

Many countries do not have the technology or the know-how either to adapt to the effects of climate change—from building sea defences against a rising tide to the development of more drought-resistant crops. In this context, countries such as Brazil, China, India and other "G77" countries want to see the creation of a "Global Technology Pool for Climate Change" that would try to ensure access green technology without the barrier of private patent protections.

However, European businesses are very much divided over the Copenhagen talks. On the same day that Business Europe issued its polite reminder to EU leaders, other businesses who consider themselves climate champions sharply criticised the stance of the employer's federation.

In a joint media statement response to the Business Europe letter, three corporate green alliances—the Prince of Wales' EU Corporate Leaders Group, the Climate Group and WWF's Climate Savers (which include such companies as Shell (RDSA), Philips (PHG) and Deutsche Telekom (DT))—said that not everyone in the corporate community agreed with the Business Europe stance.

"The positions taken by many traditional trade associations, including Business Europe, do not necessarily reflect a consensus in the business community," it said.

"The EU should raise its unilateral emissions reduction target to 30% showing real leadership ahead of the Copenhagen Summit," the statement continued. "This would boost confidence in the international carbon market and encourage the investment needed to drive transformational change in the power, industry and transport sectors."

"Crucially, due to the impact of the recession, a 30 percent target would cost substantially less now than 20 percent was expected to cost in 2008."

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