Energy-saving firms for CO2 cut flexibility

"Don't negotiate, but trade" greenhouse gases, says EU sustainable energy association

The EU should support the use of flexible instruments for cutting greenhouse gas emissions, a European "sustainable energy" industry association said yesterday. "Many in Europe still underestimate these instruments," Paul Metz of E5 - the European Business Council for a Sustainable Energy Future - told a conference in Brussels. "We support all market-based policies."

In the run-up to the Kyoto negotiations, EU governments opposed the inclusion of flexibility provisions in the protocol, fearing that they would undermine the main aim of reducing greenhouse gas emissions. With emissions trading, joint implementation and a clean development mechanism now written into the protocol, EU countries appear to be shifting towards taking a more positive line on their use, while warning that strict rules and limits will have to be set (ENDS Daily 24 March).

For European renewable and energy-saving industries represented by E5, the shift has not gone far enough. The EU is spending too long trying to decide on new collective and individual targets and not enough on taking action, Mr Metz said. "Implementation of policies and measures must start quickly to ensure measurable progress by 2005," he continued. "New negotiations now threaten decision-making on implementation...Instead, the emission trade within the EU should be started [in the] short term." "Don't negotiate, but trade," he concluded.

The introduction of market-based measures such as emissions trading could "help avoid new negotiations on burden sharing," Mr Metz insisted. "Such measures contribute to achieving a 'high-level-playing-field', stimulate innovation for carbon efficiency, do not discriminate [between] technologies, are more efficient in public management than 'command and control' regulations, and are more effective than 'voluntary or negotiated actions' in the majority of economic sectors."

Market-based instruments advocated by E5 include the establishment of "public greenhouse gas exchange markets" in each EU country. "Quickly starting the emission trade within the EU brings a competitive advantage for Europe," Mr Metz said. Under electricity market liberalisation measures currently being introduced around the EU, power supply companies should be given a "renewable portfolio obligation," which should increase to 15% in 2010 with an EU-wide tradable quota, he added.

Ambitious measures to restrain global warming should be discussed in term of "benefits" rather than "burden sharing," according to E5. Following the Kyoto negotiations, "stock markets have not collapsed and will gradually start to reward the pioneering companies that supply...the most carbon-efficient services," Mr Metz concluded.

Follow Up:
E5, tel: +31 26 362 0450.

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