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Benny Peiser: Europe Needs An ‘Exit Strategy’ From Climate Policy Trap

Europe cannot act unilaterally to tackle carbon emissions, if there is no global agreement, without damaging its fragile economy further.

Next week, another round of international climate negotiations will start in Durban, South Africa. Expectations are low that the United Nations summit will overcome the solidified deadlock that has lasted for more than 10 years. Time is fast running out for the Kyoto Protocol, which expires at the end of 2012. At the Copenhagen climate summit in 2009, western nations promised $30bn between 2010 and 2012 – and $100bn a year by 2020 – to help poor countries adapt to climate change. But this pledge by developed nations is conditional on China, India and other emerging nations signing up to an international agreement, something that is not going to happen anytime soon.

No wonder the British Government is playing down the chances of a legally binding treaty before 2015 or even 2020. Even within the European Commission, major concerns about its aggressive green targets have started to surface. The European Union is now seriously considering discontinuing its unilateral decarbonisation strategy in the absence of a global agreement. In a draft of its Energy Roadmap 2050, the commissions warns that “if coordinated action on climate among the main global players fails to strengthen in the next few years, the question arises how far the EU should continue with an energy-system transition oriented to decarbonisation.”

In the run-up to the Durban summit the EU has, therefore, made a new offer – trying desperately to overcome the stalemate. Europe is ready to extend the Kyoto Protocol, but only if emerging nations agree to a legally binding agreement by 2015 – and start talks for it right away. But Europe’s clever plan has been shot down by the BASIC countries – China, India, South Africa and Brazil. They have kicked the ball into the long grass by announcing that any future agreement must be based on the next report by the Intergovernmental Panel on Climate Change, which will not be published until 2014, and a review of the UN climate convention – not due to happen before 2015.

In short, the enduring gridlock of international climate diplomacy is almost certain to continue for many years to come. Yet, Europe’s political isolation on CO2 emissions is a growing burden for families and businesses alike. The EU’s unilateral climate policy puts European businesses and, in particular, energy intensive users at a disadvantage with regards to cost and international competitiveness. It does not make any sense to make industry and manufacturing, in particular, increasingly uncompetitive – or to drive it out of the continent; and, therefore, further weaken Europe’s crisis-ridden economies by driving up energy costs. Nor does it make sense to increase fuel poverty in this way.

To escape from this green trap of its own making Europe needs an exit strategy. In 2008, when European heads of state agreed to cut CO2 emissions unilaterally, by 20 per cent by 2020, they introduced a revision clause that made the EU climate package conditional on the actions of other major emitters such as the USA, China, Russia and India. The revision clause instructs the union to conduct a future review of the entire climate package “including the effects on the competitiveness of European industry and other economic sectors”. As a result, the EU has a legal escape route – which should now be seriously contemplated.

Given the manifest reluctance of the world’s big emitters to accept any legally binding carbon targets and in face of our deepening economic crisis, Europe should undertake a comprehensive review of its economically damaging carbon targets and – in the absence of an international agreement – should consider the suspension of all unilateral climate policies that threaten Europe’s economic recovery.

Public Service Europe, 22 November 2011