ENVIRONMENT: EU Members Prepare to Earn from Pollution

By Julio Godoy Reprint | | Print |

Julio Godoy

PARIS, Apr 23 2004 (IPS) - Leading European nations are preparing to earn more and pollute more under a controversial emissions trading scheme, environmentalists say.

Leading European nations are preparing to earn more and pollute more under a controversial emissions trading scheme, environmentalists say.

The scheme gives European Union (EU) firms quotas on their volume of permissible emissions. If they pollute more, they pay for it. If they pollute less, they can ‘sell’ the leftover to another firm that may be exceeding its quota.

The scheme is intended to cap emissions and also provide an incentive to firms to pollute less.

But it is not working that way in major European countries such as France and Germany, environmentalists say. Governments in both countries have inflated emissions figures from industry. This can mean both more pollutants in the air and more money for industry that wants to sell the leftover emission ‘rights’.

"Actually the French emissions of carbon dioxide in the economic sectors covered by the EU directive have fallen seven percent during the last ten years," Laetitia de Marez from Greenpeace France told IPS. "Despite that, the government in Pari by overestimating the emission rights has decided to increase them by four percent by the year 2010."

The EU directive covering emissions from a certain group of industries follows the Kyoto protocol of 1997 under which leading industrialised nations agreed to cut emissions in relation to 1990 levels in order to reduce global warming.

The agreement provides signatory countries with "flexibility" mechanisms such as emissions trading. Under the EU trading scheme, its firms can also sell ‘clean technology’ to developing countries, and book the resulting reduction in emissions in those countries as its own.

"Emissions trading is a very effective and cost-efficient instrument by which to achieve climate protection targets," Felix Matthes, deputy director of the Oko Institut (Ecological Institute) in Germany told IPS. "But its success will largely depend on whether it can be developed as a simple instrument which also sets ambitious reduction targets for companies."

That is not happening, says de Marez. Carbon dioxide (CO2) emissions have fallen 14 percent in the French industrial sector, 17 percent in the energy sector and six percent in agriculture since 1990 as a result of better technology, she says. The officially stated rise in emissions now is "a swindle" and a claim to the "right to pollute."

French enterprises will now possess a large and excessive quota of emissions rights, which they will try to sell to other European countries, leading to an artificially low price for CO2," de Marez said. Polluting companies would then rather buy the right to pollute on the cheap than reduce their emissions.

Where pollution has indeed risen is the transport and construction industries not covered by the EU directive. CO2 emissions from these industries have risen on average 20 percent since 1990, environmental studies show.

Germany is engaged in a similar move. The government has sought the right to throw up 503 million tonnes of pollutants by 2007, when a survey of German industries shows that its emissions are in a declining trend.

The survey of 2,400 industrial units by the Federal Agency for Environmental Protection (UBA, after its German name) says emissions from 2000 to 2002 were less than 500 tonnes.

"German companies want to sell emission certificates to southern European industries which face enormous difficulties in fulfilling the Kyoto emissions values," UBA director Andreas Troge told IPS. "German companies will certainly make good money with the emission rights."

Germany industry has welcomed the government quotas, but it is "a capitulation in the face of the pollution lobby," Regina Guenther of WWF told IPS. "With its overestimation of CO2 emissions, the German government has mutilated the good effects of the Kyoto protocol."

The German quotas were set following a fierce debate between the finance and the environment ministries. Finance minister Wolfgang Clement who was backed strongly by German industry prevailed over environment minister Juerguen Trittin.

The French limits were set in consultation with French industry without any open debate.