Bloomberg News

Poland Says EU CO2 Goal Conditional, Has Doubts on Cost Study

February 01, 2012

(Updates with carbon prices in sixth paragraph.)

Jan. 31 (Bloomberg) -- A potential European Union move to a stricter emissions-reduction goal is conditional on efforts by non-EU nations to cut greenhouse gases, a Polish government official said.

Poland maintains its position that the EU agreed to lower pollution by 20 percent by 2020 from 1990 levels and that deepening the goal to 30 percent “is conditional on comparable moves by other countries,” said Zbigniew Kamienski, deputy director at the economic development department of Poland’s Economy Ministry.

“As we know, this is not the case now,” he said in an interview in Warsaw today during a climate conference.

The costs of tightening the EU’s carbon-reduction target are less than previously estimated, an analysis by the European Commission, the bloc’s regulatory arm, showed yesterday. A 30 percent goal would involve cutting greenhouse gases by 25 percent in the bloc, and using imported emissions-reduction credits to account for the remaining 5 percent.

The analysis, requested by governments, came as environmental lobbies and companies including Royal Dutch Shell Plc urge the EU to adopt a more ambitious climate goal and curb the supply of allowances in the EU emissions-trading system, the world’s largest, after prices slumped to a four-year low last year.

‘Lot of Doubts’

EU environment ministers are due to discuss the analysis when they next meet on March 9. Prices for EU carbon permits rose 0.9 percent at 7.84 euros ($10.35) on the ICE Futures Europe exchange in London. Connie Hedegaard, the EU climate commissioner, said today in Brussels that the price of carbon is “too low.”

“We have a lot of doubts concerning the cost analysis presented by the European Commission as we have no access to the analytical model, which is protected by copyright,” Kamienski said. “It’s strange that when we are about to take very important decisions for Europe’s economy, we are expected to accept it blindly.”

Member states remain divided on whether to raise the stringency of the EU’s climate policies, a step that would cost the bloc a total of 70 billion euros, according to the analysis.

The cost of moving to a 30 percent emissions-reduction target in 2020 would range from 10 euros per capita in the Czech Republic to 136 euros in Luxembourg, according to the EU document. Four out of 27 nations in the bloc, Estonia, Latvia, Bulgaria and Romania, may make a profit of 7 euros to 54 euros per capita, it showed.

Goals Under Debate

While western European countries have voiced support for tighter pollution caps on companies, eastern nations, led by Poland, have in previous years tended to favor a more cautious approach and said a more ambitious target could hurt their economic competitiveness.

The commission analysis is in the form of a strategy paper to be presented to member states for consideration and does not constitute a legislative proposal. Denmark, which holds the bloc’s rotating presidency, vowed to stimulate a debate on the EU long-term carbon goals at the March meeting of environment ministers.

In a policy paper presented last year, the commission said the most cost-effective way to achieve the 2050 goal of reducing carbon by at least 80 percent would be to lower discharges by 40 percent in 2030 and 60 percent in 2040. The EU may cut greenhouse gases 25 percent by 2020 compared with 1990, as long as it steps up energy-saving measures, according to the commission.

“We can’t treat it as economically beneficial while yesterday’s analysis raises a lot of doubts,” Kamienski said.

--Editors: Alessandro Vitelli, Randall Hackley

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#<513959.7994530.2.1.95.14779.25># -0- Jan/31/2012 12:10 GMT

To contact the reporter on this story: Marek Strzelecki in Warsaw mstrzelecki1@bloomberg.net Ewa Krukowska in Brussels at ekrukowska@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net; NI CLIMATE NI CMD NI CMDMARKET NI COAL NI COALMARKET NI COS NI ELC NI ENV NI ENVMARKET NI FINNEWS NI GAS NI GASMARKET NI MARKETS NI EXCLUSIVE


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