NEW EU PATH ON CLIMATE & ENERGY

[Anonymous]

New EU path on climate and energy
The
European Commission is due to unveil a wide-ranging set of proposals on
energy and climate issues.It will include targets on reducing
greenhouse gas emissions and increasing use of renewables, and measures
to free competition among energy providers.The Commission aims to set a
global benchmark for reducing emissions when Kyoto Protocol targets
expire in 2012.The package of measures will have to be approved by
European governments before it can come into force.Analysts anticipate
disagreement on some of the likely proposals, notably on freeing up
competition in energy supply.The launch will come at 1230 local time in
Brussels (1130 GMT) at the end of a meeting of commissioners from the
various European directorates.

Road block
In recent years the
European Union has been the most powerful political voice urging
targets on reducing greenhouse gas emissions beyond the current Kyoto
period.But at the latest UN climate meeting its attempts to get new
targets debated met with failure. The Commission is now likely to urge
that all developed countries across the world adopt a goal of cuts in
the order of 30% by 2020.If other developed nations demur, the
Commission will argue that Europe should set itself a less stringent
unilateral target.Its principal tool for achieving cuts would be an
enhanced Emissions Trading Scheme (EU ETS). But that only affects
businesses, leaving emissions from road transport and domestic heat and
power unaffected.A voluntary agreement under which car manufacturers
promised to increase the efficiency of their products has not produced
the results which the Commission wanted, and it may now propose a
mandatory regime.In October the EU announced a set of about 75 measures
aimed at increasing energy efficiency overall by 20% by 2020, and the
Commission may urge setting a comparable 20% by 2020 target for
renewable energy.

Competing interests
On the business side,
the Commission is likely to propose an enhanced “unbundling” of energy
supply across the continent in a bid to increase competition.In the
last three years it has raided the offices of energy firms it believed
were operating uncompetitively, and warned 17 member states for failing
to implement competition legislation; but it is poised now to go
further.New measures could include “unbundling” the ownership of energy
businesses to avoid conflicts of interest.It may propose that companies
generating electricity and distributing it would not be permitted to
have owners in common; gas production companies would be divorced from
pipeline operators.But analysts believe these measures may not meet
with the approval of all Europe’s national governments.Some countries
have historically preferred a more joined-up approach to the power
business, while new entrants to the EU might argue the free market,
competition-based model is not appropriate for them.A tough stance on
greenhouse gas emissions may also prove controversial, with several
European governments having recently sought to increase their emissions
under the ETS.Ministers are likely to debate the Commission’s proposals
in March. 

[Author]

January 10, 2007 at 12:53 PM