European firms back US approach to Kyoto

Unice warns against rapid EU implementation, trading caps; seeks developing country engagement

European businesses have strongly distanced themselves from the EU's official position for next week's international talks to finalise rules under the UN Kyoto climate change protocol. Employers federation Unice yesterday set out a series of demands for the negotiations, largely backing positions held by the American-led "umbrella" group of countries.

The EU would risk damaging the competitiveness of European business if it rushed into ratifying and implementing the protocol ahead of its major trading partners, says Unice. The bloc is keen to set an example by ratifying by 2002. Other developed countries are far from certain to follow suit.

A crucial step before ratification should be full agreement on rules governing the protocol's flexible mechanisms, Unice argues. In particular, emission credits from all three mechanisms should be fully tradable with each other, it says. The association also opposes exclusion of any types of projects from the clean development mechanism, as demanded by EU governments and European environmental groups.

Backing an earlier statement by the European Round Table of Industrialists (ENDS Daily 16 October) and again more in line with the US than the EU position, Unice also argues against imposing caps on the Kyoto flexible mechanisms. EU governments want countries to be required to achieve at least 50% of emission commitments domestically.

Whereas the EU has called for a cautious approach to inclusion of carbon sinks under the protocol, Unice backs them as an "important opportunity" to reverse emissions growth. "Sound" sinks projects should be included within countries' emissions targets and also allowed under the clean development mechanism, it argues.

Perhaps most politically embarrassing for EU negotiators, Unice rejects European governments' consistent argument that industrialised countries must take a strong lead in demonstrating emission cuts before developing countries are asked to contribute. "Engaging developing countries in the process of responding to climate change must be a priority" at next week's talks, it says, once more echoing the US position on this issue.

Follow Up:
Unice, tel: +32 2 237 6511.

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