EU agrees climate change deal

The EU compromise deal saw a number of changes to the original proposal, but was nevertheless seen as a breakthrough against the backdrop of two weeks of global talks on climate change in Poznan, Poland, which delivered little concrete action.

Speaking from Poznan, UK Energy and Climate Change Secretary, Ed Miliband, said of the EU deal: “The rest of the world has been watching, and Europe has delivered a credible and ambitious climate package. It sends a signal that, even in the most challenging of economic times, it's possible to take bold far-sighted action to slash emissions.”

The EU Climate Change and Energy package, which was agreed at the European Council and will be voted on at the European Parliament this week, reached agreement after strong opposition from several eastern European countries, including Hungary and Poland, which were seeking concessions because of their dependence on heavily polluting fossil fuels.

A compromise was able to be reached, however, while still committing to legally binding targets for Europe to reduce its greenhouse gas emissions by 20 per cent on 1990 levels by 2020. There was a further commitment to increase this target to 30 per cent should an international climate change agreement be reached in Copenhagen at the end of next year.

Other key elements of the package include a European wide commitment to 20 per cent of all energy to come from renewable sources by 2020 and a tightening of the European Emissions Trading Scheme (ETS), a cap and trade scheme which covers the industrial sector, responsible for 50 per cent of all European emissions.

Under the new agreement, all emission will be capped at 21 per cent below 2005 levels by 2020, with at least 60 per cent of EU ETS allowances to be auctioned by 2020.

In another significant development, billions of pounds worth of EU ETS allowances are to be used to back cutting-edge technology to trap and bury harmful C02 gases underground. The technology, called Carbon Capture and Storage (CCS) will see up to 12 CCS demonstration plants part-funded by 300 million EU ETS allowances, worth around £5 billion.

“Today's agreement gives us the practical means to achieving our emission targets,” said Miliband. “The EU's Emission Trading System is strengthened with a tighter cap and a greater levels of auctioning, putting a premium on low carbon technologies. We'll see a massive increase in renewable energy and pressure from the UK has secured billions in funding for vital carbon capture and storage demonstration plants.”

In the end, concessions had to be made, however.

Under these, nine Eastern member states, led by Hungary and Poland, will benefit from more revenues from ETS to help fund low carbon projects. 

European heavy industry has als gained concessions by receiving a large number of free carbon allowances. 

And, in a move criticised for letting Europe off the hook on its emission reduction obligations, the package also allows for member states to meet up to half of emission reduction targets by importing UN-approved carbon offset credits from projects in the developing world.

However, against a backdrop of little progress at UN Climate Change talks in Poznan, the European deal was being seen as significant.

The talks in Poznan are the latest round of international negotiations to replace the Kyoto Protocol, which is due to culminate in Copenhagen next December.

The main highlights of those talks was the decision to set up a fund to help poor countries adapt to climate change, although that fund is thought to be too small to achieve anything much.

In one of the few significant breakthroughs at Poznan, however, developing country Mexico pledged to halve its emissions by 2050.

The talks were not billed to deliver much mainly because of the hiatus in US policy-making as power is handed over from President Bush to president-elect Barak Obama.

A great deal of hope is being placed on a breakthrough on global climate change talks once Obama takes office because of the pledges he has made on tackling climate change at home.
 
"Combined with a new spirit of engagement from the United States, there is now everything to play for as we put the pieces in place for a global climate deal in Copenhagen next December,” said Miliband.