Poles Apart

Poland has been to the European Court of Justice (ECJ) arguing that the European Union's mechanism for cutting CO2 emissions across the EU was unfair to them. This is because the EU's system uses natural gas-based benchmarks whilst Poland's economy is run almost exclusively on coal (See picture).

Basically this means that, when the EU hand out allowances under it's Emissions Trading System (ETS), Poland won't be getting enough. Effectively driving up the price of their energy year after year and raising the prices of goods and services. Of all the 27 countries in the EU, they will end up being hit hardest by the ETS.

The ECJ dismissed their complaint, saying the EU had not acted unfairly.

The Poles, understandably, were dismayed by the verdict and are considering whether to appeal.

Whilst I understand their reluctance to drop coal (They have lots of it and it's very cheap), they should just accept the inevitable and do just that. The EU was already commited to dramatically cutting carbon emissions before the Poles joined. Regardless of how this was to be done, Poland would have to make big changes anyway. Or did they think they'd be exempt?

Instead of fighting it (They've already vetoed EU plans to cut emissions faster. See here), they should start working out how to make the switch now. They could begin that by talking to one of their own major energy providers, PGE, who already have ideas in that direction.

At the end of the day, whilst the transition may be painful, they can console themselves that they will be playing their part in sparing future generations of Poles the nightmare of climate change.

More background here.

Poland Vetos Further EU Carbon Cuts...For Now

Last year I explained how I thought the EU had lost it's backbone by not taking the opportunity to make deeper cuts in carbon emissions by 2020.

Well, it looks like they were listening ;) because last week they were attempting to change their target for cuts from 20% to 25% by 2020!

This was great news. Not only would it cut emissions faster but it would make later reductions more cost efficient to achieve (As this 'Road Map' shows).

On March 9th, EU ministers from all countries met to vote on the new targets but Poland decided to veto it. The Poles depend on coal for around 90% of their electricity production so you can understand something of their reasons, but their environment minister, Marcin Korolec, tried to hide behind this: "There is no point whatsoever in gambling with the European economy's future, introducing policies that might put our industries in jeopardy versus our competitors". Yeah, right. That's your only reason.

This link gives more background, unfortunately I've lost the one on the post-vote talk. In it, the EU say they are disappointed by the veto (Poland was the only one to vote against it in the end) but this won't be the end of this. It sounded a lot like they would go ahead without the Poles.

If they do, then I applaude them. The time for old thinking is over. We've got to stop thinking about national interests, and economic advantage and start working together to stop the runaway climate train. If we don't, then we leave future generations with a train-wreck of a planet and economic chaos.

Carbon Tax News

In this post, I told you how the Chinese are kicking up about the EU's new ruling that all flights in Europe would be subject to a carbon tax (The ETS).

Well the Chinese and 22 other disgruntled nations (including the US and Russia) met in Moscow on the 23rd February to discuss possible joint action. There are fears that all this could deteriorate into a full-blown trade war, all over a couple of extra dollars/pounds per passenger! The participants keep whining on about how the EU were wrong to go it alone when a global agreement was being negotiated. The EU say they've lost patience with that, seeing as it's been going on for 14 years now, but they're perfectly ready to drop their scheme in favour of a worldwide one...

The EU is holding firm, for now.

The ETS is getting the steel industry angry as well but for other reasons. The EU has finally realised that the economic downturn has undermined it's carbon trading scheme: The idea behind the scheme is that companies are given emission credits which allow them to emit to a certain level or cap. After which they have to buy further credits. On the other hand, if they don't use all their credits, they can sell them. That's the basis of the scheme, if you stay within limits, you pay nothing (or can even make money). If you go over, you pay. The idea is that companies will try to reduce their emissions to avoid these extra costs. That is, if the credits cost enough.

Unfortunately, that cost is set by the market i.e They're traded. Thanks to the recession, many companies are meeting their emissions caps with ease so the market is awash with them, forcing the price down. So there's less incentive to cut emissions.

Anyway, the EU have decided to remove, or 'set-aside' more than a billion of these credits, so forcing the price back up. Guess what? The big emitters, like the steel industry don't like this. Well tough. Start cleaning up your industry. More here.

Of course, not all environmentalists agree that carbon taxes, or cap-and-trade as the americans call them, are a good thing. Here's a very interesting animation about the downside of these schemes from those clever Story of Stuff people.

China Rejects EU's Aviation Carbon Tax

As from the beginning of this year, the European Union (EU) requires that all airlines flying in and out of European airports should join it's Emissions Trading Scheme (ETS).

Countries like the U.S., Canada, and China had serious objections when it was first announced, with U.S. airlines challenging it in court (and failing), and even the Whitehouse getting involved.

But why were they objecting? What it actually amounts to is a very small charge per passenger (e.g. $3 on a $300+ Atlantic crossing). It just gets swamped by all the other charges (like taxes and levies for extra baggage).

Now China has upped the stakes by banning it's own airlines from joining the scheme or raising prices on it's flights, effectively telling them to ignore the change.

This means that the EU will be forced to fine the airlines and, if they refuse to pay the fines, stop them flying into Europe. China might do the same to EU airlines in response.

Looks like this one could get nasty. And all over a tiny charge! What on earth is really going on here?

Well, the USA and Canada don't like carbon taxes on principle, and they probably fear that the ETS will grow into a worldwide scheme by the back-door.

But the Chinese? Who knows? Maybe it's a commercial judgement: An extra charge too far that might be imitated by other regions. Maybe they've got a deal going with the Americans ("Break this scheme for us and we'll give you [insert favour here] in return".

Whatever, I can't remember the last time I heard about the Chinese backing down over anything. And the EU won't want to dump this cornerstone policy.

This will be an interesting one to watch. 

Background here. China's objections here.