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Europe Reconsidering Its Unilateral Climate Policy

BRUSSELS—The European Union is for the first time clearly questioning whether it should press ahead with long-term plans to cut greenhouse-gas emissions if other countries don’t follow suit, in what could herald a significant policy shift for a region that has been at the forefront of advocating action to combat climate change.

In a document reviewed by Dow Jones Newswires, the European Commission’s energy department says the EU should consider whether the region should seek to switch its domestic energy base away from carbon-emitting sources in the absence of a global climate-change deal.

“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 decarbonization,” the commission says in a draft of its Energy Roadmap 2050. The document is an effort to look at how the EU energy and climate picture would look in 2050, according to different scenarios.

To be sure, the EU will stick to its end-of-decade greenhouse-gas reduction goals and the paper could change before it is published later this year. Even if it doesn’t, the document would only be the opening salvo in what would be a fiercely contested debate. Many member states are strongly committed to slashing emissions, and the climate-change department within the Commission, the EU’s executive, would likely resist any attempt to water down the EU’s green credentials. There has been frequent friction between the energy and climate-change departments in Brussels.

The EU has long been recognized as a global leader in the fight to slash carbon emissions.

EU law mandates that the 27 countries cut their CO2 emissions by 20% on average by 2020, compared with 1990 levels, and policy after that is being drawn with the assumption of bringing that cut to between 80% and 95% by 2050. The EU has lobbied hard to get a successor for the Kyoto treaty, the instrument that regulates carbon emissions internationally and expires next year.

A spokeswoman for Energy Commissioner Guenther Oettinger declined to comment on the content of the document.

The EU’s doubts come ahead of a climate-change summit in Durban, South Africa, which is thought to be unlikely to deliver a significant global climate-change deal.

The current focus seems to be on salvaging the minimum commitments that have driven global action since the Copenhagen summit’s failure in 2009.

In the past, the EU has rejected the idea that inaction by others was a reason to shelve its goals. But in light of the lack of international progress, there had been signs of a debate within the EU over how hard the region should push on the issue. A meeting of EU environment ministers in Luxembourg last week agreed to commit internationally to new CO2-reduction targets only if there is a clear signal in Durban that other countries would follow suit.

The draft document says there are many benefits in pushing ahead with action to reduce carbon emissions. The commission says this will drive energy-infrastructure investments that will be needed anyway and reduce the region’s external energy dependence.

Working on the assumption of a global deal, the document shows the commission urging member states to set out clear strategies for cutting emissions beyond 2020. The commission says the longer the wait, the higher the cost.

“Today there is an inadequate direction as to what should follow the 2020 agenda. This creates uncertainty among investors, citizens and governments,” the document reads.

But the document is unambiguous about the risks if Europe acts alone.

“It has to be seen clearly that there are risks associated to unilateral EU action,” the commission says in its draft. “There is a trade-off between climate-change policies and competitiveness. Europe cannot act alone in an effort to achieve global decarbonization,” the paper says.

The commission is particularly worried that EU industry would lose competitiveness in the battle for global markets against companies from other parts of the world as its costs would be higher. EU companies would likely pay higher electricity prices because clean power production would be more expensive, while some would also have to pay for their own CO2 emissions, or face big investments to reduce them.

In a May 2010 study, the commission estimated that the 20% CO2 cut by 2020 would cost €48 billion a year ($66.3 billion).

The Wall Street Journal, 18 October 2011