EU Brandishes Climate Credentials Amid Doubts Over Trump’s Aimsby and
Environment ministers to tackle tougher cap-and-trade rules
European Parliament committee sets tone with beefed-up plan
As U.S. President-elect Donald Trump pledges to bolster industries blamed for global warming, the European Union is forging ahead with legislation meant to increase the cost of the dirtiest forms of energy.
Environment ministers from the EU are due to meet in Brussels on Monday for deliberations over tighter emission caps on power plants and factories, aiming to make good on a vow to slash greenhouse gases such as carbon dioxide by 40 percent in 2030 compared with 1990 levels. The stricter rules to the EU’s cap-and-trade system would kick in as of 2021.
Global leaders are racing to head off temperatures that the United Nations sees rising as much as 3.4 degrees Celsius (6.1 degrees Fahrenheit) by 2100, which risks flooding coastal cities like New York and Los Angeles and triggering mass migrations. While differences exist in Europe over the precise policy mix, most EU decision-makers espouse the view that cutting discharges blamed for more frequent heat waves, storms and floods is good for both the earth and the economy.
“It’s a strategic choice made by Europe,” Maros Sefcovic, vice president for energy policy in the European Commission, the 28-nation EU’s regulatory arm, told reporters last week in Brussels. “We believe that we’re creating a low-carbon backbone for the new European economy.”
One challenge for Europe is that much of its economy still looks old, powered by the smokestack industries that Trump champions while being saddled with greater regulatory costs than exist in the Americas and Asia. As a result, the transition to a cleaner future poses a persistent political test in Europe as it continues to struggle with sluggish growth and high unemployment following the financial crisis.
Furthermore, no matter how successful the EU is in reducing greenhouse gases, its 10 percent share of worldwide emissions means climate protection also requires cuts by others, notably China and the U.S., the two biggest polluters.
After U.S. President Barack Obama delighted the EU by endorsing last year’s worldwide Paris Agreement to fight global warming, Trump has raised eyebrows in Europe with his ambiguous position on the landmark deal and his decisions to nominate a climate-change skeptic to head the Environmental Protection Agency, a former governor of oil-rich Texas to lead the Department of Energy and the chief executive officer of Exxon Mobil Corp. to be Secretary of State.
“Across the Atlantic, it’s a big country, it’s our closest ally, so everybody is of course looking at what’s happening, what will be the first steps,” Sefcovic said.
In that context, the EU’s environment ministers are seeking to bridge differences over emissions-trading matters that are politically touchy and technically tricky.
The bloc’s cap-and-trade program, the world’s biggest emissions market, imposes CO2 quotas on about 12,000 installations owned by companies ranging from utility EON SE and oil refiner Royal Dutch Shell Plc to steelmaker ArcelorMittal and paper producer Stora Enso Oyj, forcing those that exceed their caps to buy permits from businesses that emit less.
The credibility of the 11-year-old program has been badly shaken by a permit surplus that resulted from a politically-driven overallocation of allowances at the outset and a subsequent recession-induced drop in industrial emissions. Permit prices have slumped 70 percent over the past eight years to below 5 euros ($5.21) a metric ton. That compares with the roughly 30-euro price deemed necessary by the system’s architects to trigger moves away from high-polluting fuels like coal.
According to a confidential Dec. 14 EU report on the state of play in the negotiations on the tougher post-2020 emissions caps proposed by the commission, national governments are at odds over:
- The share of allowances to be allocated for free rather than auctioned
- The firepower of a Market Stability Reserve aimed at curbing the allowance glut starting in 2019
- The operation of two “low-carbon funding mechanisms” for poorer EU nations
Once they reach an agreement among themselves, the ministers will eventually have to strike a deal over the new emissions-trading rules with the European Parliament, the other EU legislative actor.
At the assembly’s headquarters in Strasbourg, France, last week, around 20 members and advisers from various parties and countries dashed in and out of meetings over three days to craft a package that beefs up the commission’s original proposals considerably, including by deepening the annual reduction in total allowances starting in 2021.
After the measures sailed through the environment committee at an 8 a.m. vote on Dec. 15, smiles on the faces of Green members, handshakes between the lead negotiators of the main parties and downcast reactions by industry lobbyists who had made the trek from Brussels revealed the extent of the political consensus in Europe behind climate policy.
“Clearly, Europe should go ahead, not only for climate-protection reasons but also because future technology is going to be green,” said Bas Eickhout, a Dutch member of the EU Parliament who helped forge the environment committee’s accord. “Washington will be making a big mistake by going back to the 20th century.”