EU "very close" to climate package deal; Lord Turner: UK climate targets will push up electricity prices by 25%

EU "very close" to climate package deal;
Lord Turner: UK climate targets will push up electricity prices by 25%
Reuters reports that Poland's Prime Minster Donald Tusk yesterday said that EU ministers are "very close" to a deal on the controversial EU climate package. Poland has opposed planned revisions to the EU's Emissions Trading Scheme, which it claims would raise electricity prices to unacceptable levels. However, Warsaw said it would be willing to accept the deal should it be given more "free" pollution allowances after 2013.

Euractiv reports that French President and EU Presidency holder Nicolas Sarkozy will this weekend attempt to convince eastern EU member states to sign up to the climate package. Sarkozy will meet with leaders from Poland, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Romania and Slovakia.

However, Reuters notes that Italy says that it will veto the agreement unless the package is watered down to reduce costs for industry and consumers. "If the climate package passes as it stands it will lead to a 17 percent hike in electricity bills for every Italian," Andrea Ronchi, Italy's European Policy Minister, told reporters in Brussels.

According to the FT, the Commission has taken a softer stance on the share of pollution allowances that will allocated for free as opposed to auctioned - one of the most controversial aspects of the proposal. The Commission has long favoured making industry pay for allowances, but is now willing to revise its position in light of opposition from member states and the economic downturn.

It is reported that Germany has led an effort to ensure that manufacturers - including those in chemicals, glass, steel and cement - receive free allocations if they are forced to compete against companies from non-EU countries. The German government has proposed that no company should have to buy more than 20 percent of its allowances at auction - regardless of "carbon leakage".

The package will require the unanimous approval of all 27 heads of state and government at an EU summit in Brussels on 11-12 December.

Meanwhile, there is widespread coverage of a report from the Government's Committee on Climate Change on how the UK could meet its pledge to cut carbon dioxide and other greenhouse gases by 80% from 1990 levels by 2050. The report recommends an interim target for 2020 of 34%, or 42% if there is a global deal to cut emissions.

The Telegraph notes that Lord Turner, the Committee's chair, admitted the cuts would shrink the UK economy by one per cent by 2020. The biggest impact will be on electricity prices which are expected to rise by 25 per cent for the average family, pushing 1.7 million people into fuel poverty. On Newsnight last night Lord Turner argued that Britain had opted for a more expensive renewable option than Germany and Spain, choosing to deploy more off-shore wind generation as opposed to cheaper on-shore wind generation.

The report recommended the use of renewable electricity is increased from the current five per cent to more than 30%, which would mean a massive increase in wind generation capacity.

The requirement to expand renewables to account for 30 to 40 % of UK electricity generation is contained in the EU climate package, which proposes binding targets for renewable energy use.
Telegraph Tuesday, December 2, 2008

Further useful links.
Irish Times Reuters FT FT 2 Euractiv El Pais AFP Independent Independent McCarthy Guardian Guardian-Monbiot Guardian-leader BBC Newsnight