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The Monitor's View

Europe gets serious on climate

Its plan may be flawed, but at least Europe is taking action. What is the US willing to do?

January 24, 2008



Its leaders say Europe's new plan to fight global warming will cost its citizens only an extra $4.35 per week. If true, what will they get for that burden? Leadership on climate change. Less dependence on foreign oil. And perhaps a jump in developing "green" technologies.

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In an announcement yesterday (see story, Page 1), the European Commission said it aims to tighten the provisions of its three-year-old Emissions Trading Scheme (ETS). That would enable Europe to reach its goal of reducing carbon emissions to 20 percent below 1990 levels by 2020. The plan will also nearly triple electricity generated by renewable sources (wind, solar, etc.) from 8.5 percent today to 20 percent and mandate that biofuels (made from corn, sugar cane, etc.) make up 10 percent of vehicle fuels by 2020.

The ETS employs a so-called cap-and-trade plan that allows industries to buy and sell permits to emit greenhouse gases, which scientists say contribute to global warming. The ETS has seen considerable criticism for distributing too many free permits, which have failed to produce much change, and for allowing companies to buy permits from outside Europe for projects of dubious environmental value.

The new rules would require big emitters, such as electric utilities, to purchase permits, if they need them, beginning in 2013. By raising the cost of polluting, the theory goes, industries will be forced to become more efficient and will seek out alternative energy sources.

Each country will have goals designed for its circumstances. Fragile economies, such as Bulgaria and Latvia, face the lowest hurdles. The billions of dollars in revenue raised from initially selling permits to industries will go to national governments and could be used to promote alternative fuel sources and new technologies.

Europe has plunged ahead without knowing if the rest of world will follow. Business leaders there are raising concerns that industries will be at a competitive disadvantage with those in countries without caps on greenhouse gas emissions. Industries and jobs could move out of Europe and the pollution with them. They argue: How will that lower overall worldwide emissions?

Last week French President Nicolas Sarkozy proposed a carbon tax on imports from countries that fail to set up their own caps on greenhouse gases. Such a tax could be viewed as protectionism and would likely have to be OK'd by the World Trade Organization, a significant hurdle.

The Bush administration has been reluctant to agree to cuts in US emissions without pledges from other major polluters, such as China, that they will follow suit. Environmentalists argue that if the US would lead by capping its emissions, the world will follow.

Will Europe's plan really cost only $4.35 a week? Or might it cost workers their jobs as industries desert the EU? Europe will perform the experiment and find out.

Creating a permit market is also an experiment with risks. And the proviso for more use of biofuels is troubling, since it's not clear that turning plant material into fuel always makes good economic and environmental sense.

Nonetheless, Europe deserves credit for taking serious action. The onus now is squarely on the US: Just what is it willing to do?

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