European Union Archives

Mario Sechi and I have a paper arguing that Europe must find a way out of the Kyoto failure. A country such as Italy, that faces higher costs than most EU members, might lead a step forward by joining the Asian & Pacific Partnership on Clean Energy and Climate. However unlikely, should such a path be followed all Europeans would be better off.

A report by the European Environment Agency claims that the EU will be able to meet its Kyoto targets thanks to "additional measures being planned" as well as "the use of Kyoto mechanisms by various Member States". This may be exciting for the Kyoto-ists - yet it is not convincing. First, it is not clear what "additional measures" is the EEA talking about. Of course there are additional measures that may work - for example, just impose a cap to emissions (at what cost? is the relevant question then, that the EEA doesn't address at all). Secondly, it is not clear how the Kyoto mechanisms may work as long as most EU Member States are missing their national targets. Of course there is a way for the Kyoto mechanisms to work: just allow EU countries to buy hot air from developing countries - that is, pursue a reduction on paper with no effect on the actual level of global emissions. The EEA is cheating: that's fine, they are paid for it. What is not fine is that most of those who are in Montreal will take such "projections" seriously, and European policies that will affect the Old Continent's development will be designed accordingly.

Writing in yesterday's The Observer British Prime Minister Tony Blair speculates on what may be the correct climate policies after the Kyoto Protocol first commitment period ends in 2012. Despite his belief that science is settled (while it is not), Mr Blair sets forth a number of challenging points:

• "[E]ven if the US did sign up to Kyoto, it wouldn't affect the huge growth in energy consumption we will see in India and China."

• "There are huge opportunities in environmental technology and huge possibilities in sustainable development, if the right framework for low carbon energy generation can be stimulated."

• "We need to create the right market conditions to increase the necessary investment to develop and install new low carbon energy generation - and to ensure it is shared with emerging economies."

At the Campaign for Fighting Diseases website, Richard Tren, director of Africa Fighting Malaria, writes that German chemical company Bayer has supported the European Union's threats against Uganda should the country decide to use DDT in its malaria control programme.

Not only is this scandalous -- it is a major conflict of interest. Tren points out that "[A Bayer representative] sits on the board of the World Health Organization's Roll Back Malaria (RBM) coalition - as do other commercial contractors to US Agency for International Development (USAID)."

Tren is a signatory to the Kill Malarial Mosquitoes Now (KMMN) declaration, what Tren calls "A new coalition which has emerged in the US to focus the minds of USAID in their malaria control efforts."

IPN has just published a new book co-authored by Gary Marchant, a professor in both the Arizona State University law school and school of life sciences. The book - Arbitrary and Capricious: The Precautionary Principle in the European Union Courts - explores how the principle has been employed in over 60 court decisions. Marchant concludes:

No one can argue against being safe rather than sorry. But the precautionary principle is flawed in theory and practice, and its enshrinement sets Europe down a path that will wreak havoc on the economy and public health of not only itself but also its trading partners.’

Today, Gary has an article in the Wall Street Journal Europe - "Unprincipled Precaution" (link to article on IPN's website) - which explores some of the book's themes. [for WSJ subscribers - original link]

In a Parthian shot at President Bush, soon to be (thankfully) ex-Chancellor, Gerhard Schroeder, is quoted as saying in a speech to trade unionists, "I can think of a recent disaster that shows what happens when a country neglects its duties of state towards its people... My post as chancellor, which I still hold, does not allow me to name that country but you all know that I am talking about America." Schroeder's remarks were reportedly greeted with laughter and applause (perhaps tinged with Schadenfreude?).

I too "can think of a recent disaster that shows what happens when a country neglects its duties of state towards its people." Specifically, during the 2003 European heat wave, there were 5,250 deaths in Germany.^1,2 These were eminently avoidable, especially if the German government had spent a fraction of the time, resources and energy -- yes, energy -- to help its population cope with the extreme heat as it seems to spend on cheerleading for the ineffective, not to mention wholly wasteful, Kyoto Protocol. [Click here for an analysis of how (in)effective and wasteful the Protocol would be.]³

I have an article in today's TechCentralStation about a proposed "electricity strike" in Italy. 4 major consumers associations are asking Italians to stop using electricity tomorrow at 11,30 am, for 5 minutes, as a way to protest against high oil prices that translate into high prices of electricity, gas, etc. Protesters call for political measures aimed at counterbalance the effect of rising oil prices, including a shift in our "energy mix" (the sources through which energy is generated) and possibly price controls. What they doesn't seem to realize is that free market provide a built-in mechanism to react to high prices: demand will eventually fall and prices will have to decrease. If government gets into the process it may simply make the problem harder to solve, as a cap on prices might lead to further scarcity - i.e., waiting lines at gas stations or blackouts. Consumers should understand that that is not their best interests.

At the G8 meeting in Gleneagles, Scotland, the 8 most industrialized countries issued a joint statement on climate. There President Bush's focus on energy efficiency as well as search for long-term solutions (as opposed to "cap & trade" schemes for greenhouse gases) is largely endorsed by, among others, leading European nations. Consequently political debate on climate has moved towards a more science-based, long-sighted, truly global approach - at least this is what I claim in a TCS article.

If that is true the European Union might take the opportunity to revise its Emissions Trading Scheme (ETS), the tool it adopted in order to make it cheaper the pursuit of the Kyoto targets. In fact it is pretty clear that the EU will not be able to meet its goals through actual reduction or intra-European trade of allowances: the European Environment Agency's data show that European emissions are far too high. Moreover since most European countries are emitting well above the 1990 levels - whereas they would be supposed to be on track to emit 8% less than 1990 by 2008-12 - the ETS will likely not work for the very fact that... there will be little quotas to sell in the first place. We are going to have a very low supply vis-à-vis a very high demand. The scarcity is reflected in the rising price of quotas themselves.

When the process began on January 1st, 2005 Kyoto-optimists guessed that the price would be around 10 euros per tonne, yet it is today as high as 30 euros per tonne and it will likely increase to less than 40 euros per tonne (which is the cost of sanctions for non-complying countries). The only way Europe has to meet the targets is to buy "hot air" from Russia and other emerging economies - however, if that is the case, no actual reduction in emissions is achieved. What we would have is simply a wealth transfer from the EU to other countries.

I do hope that European policy-makers, as well as industry and the general public, are realizing the ineffectiveness of EU climate policies and regard Gleneagles as a new starting point. After all it is easier to get from Brussels to Gleneagles then from Brussels to Kyoto.