KYOTO SINKS EUROPE

 Financial Post, 9 January 2007

http://www.canada.com/nationalpost/story.html?id=03445f57-0777-4554-ac7c-ec63cb073223

 Kyoto sinks Europe: Billions in costs make it more and more
unlikely that the EU can continue to go it alone slashing carbon
emissions

 By Benny Peiser

 A political drama is unfolding in Europe over the future of its
Kyoto strategy. Its outcome will shape the future of climate
policy and international negotiations for years to come.



At the heart of the escalating confrontation lies Europe's
Emissions Trading Scheme (ETS) and mounting concerns about its
prospective failure. The crisis centres on a fundamental conflict
between economic realism and environmental idealism, between
national interest and green ideology. It has exposed the
increasing tension between Europe's green enthusiasm and the
realization that its unilateral framework comes at a hefty cost
that is beginning to erode the economic stability of a waning
continent.



Carbon trading is the EU's principal strategy for meeting its
Kyoto target of reducing CO2 emissions by 8% by 2012. The scheme
was launched two years ago in the hope that it would achieve what
more than 10 years of political commandeering had failed:
significant reductions in CO2 emissions. Instead, year after
year, most EU countries continue to increase their greenhouse-gas
emissions. Rather than proving its effectiveness, the trading
system has pushed electricity prices even higher while
energy-intensive companies are forced to close down, cut jobs, or
pass on the costs to consumers.



As the reality of economic pain is felt all over Europe, deep
cracks in its green foundations are beginning to become apparent.
Guenter Verheugen, the EU's industry commissioner, has warned
that by "going it alone" Europe is burdening its industries and
consumers with soaring costs that are undermining Europe's
international competitiveness. Instead of improving environmental
conditions, Europe's policy threatens to redirect
energy-intensive production to parts of the world that reject
mandatory carbon cuts.



Verheugen's warning reaffirms what U.S. administrations have been
saying for many years. It is aimed at the rapidly evolving
challenges posed by Asian competitors such as China and India
that are set to overtake Europe's sluggish economy within the
next couple of decades. Indeed, Europe's imprudent unilateralism
is not only constraining its trade and industry; worse still, it
has led to a significant slowdown in European R&D budgets, a
sliding trend that is hampering the development of low-carbon
technologies.



The ETS's malfunctioning is partly due to an inherent flaw that
allowed member states to allocate more emission permits than
European industrial plants actually needed. Although Europe's
energy utilities receive carbon permits free of charge, they have
passed on the market price to industry and private consumers. In
consequence, Germany's energy costs rose by almost ?6-billion
($9.2-billion) in 2005, a price tag that is expected to double in
the next couple of years. The cunning strategy ensured that power
companies reaped billions in windfall profits. And yet without
the massive sweetener, Brussels could not have gained the support
of industry for this risky scheme.



The dodgy bargain ended in political fiasco: Last year, the
trading scheme nearly collapsed as carbon prices crashed. In a
desperate attempt to salvage an increasingly volatile system,
Brussels has now slashed 7% from the National Allocation Plans
recently submitted by EU member states from the second phase
(2008-12).



The decision has been greeted with irritation and sheer anger in
many European capitals as the damaging consequences become
apparent. Germany's Economy Minister has called the cuts "totally
unacceptable" and Berlin is threatening to challenge the decision
in court.



As far as the imminent future is concerned, one thing is patently
clear: After years of inflated promises that the Kyoto process
would not upset their economy, European governments are beginning
to realize that the era of cost-free climate hype is coming to an
end. In its place, concern is growing that key industries and
entire countries will pay a devastating price for Europe's
reckless Kyoto craze.



The stakes are particularly high for Germany. Despite its
customary role as environmental cheerleader, it has been hit
hardest. Brussels bureaucrats have slashed more than 30 million
tonnes from its annual carbon permit. It faces up to ?3.5-billion
in fines if it cannot bring down emissions by 2008.



Germany is extremely vulnerable to imposed energy caps. It is
strongly opposed to plans for replacing its coal-fired power
plants with gas-fired facilities, as such a move would only
increase its already precarious dependency on Russian gas
imports. Furthermore, successive governments have agreed to shut
down all nuclear power plants, which account for a third of
Germany's electricity generation. The Greens' anti-nuclear
achievement has thus turned ideological triumph into an energy
nightmare.



To make matters worse, Germany's industry bosses have warned that
they will not proceed with billions in intended energy
investments should the government lose the bitter dispute with
the European Commission over slashed emission credits. The EU has
made clear that it will not yield to German demands, as this
would destabilize its fragile trading scheme. However, should
German companies be forced to buy carbon credits at higher
prices, it will simply remove funds and economic incentives that
the government had hoped would be invested in alternative
technologies.



As the price for electricity, goods and services continue to rise
and Asian competitors catch up with Europe's lethargic economy,
the public is beginning to question Brussel's unilateral climate
policy. According to a recent EU poll, more than 60% of Europeans
are unwilling to sacrifice their standard of living in the name
of green causes. As long as advocates of Kyoto got away with
claims that their policies would not inflict any significant
costs, many people were tempted to believe in improbable
promises. Now that the true cost of Kyoto is starting to hurt
European pockets, the erstwhile green consensus is unravelling.



Oblivious to its deepening isolation, Europe is trying
frantically to salvage the political capital it has invested in
the Kyoto process. China and India have consistently ruled out
participating in a global emissions trading scheme. It is
unlikely that their booming economies and growing consumer
demands would cope with energy restrictions on their development.
Just the thought of allocating carbon credits for up to two
billion potential middle-class consumers makes the mind boggle.



In recent weeks, even U.S. Democrats have cautiously started to
lower expectations. They now concede that even under a Democratic
administration, the United States is unlikely to join any
international climate regime that would exclude Asia's looming
superpowers and burden its economy with unilateral obligations.



Political realists have absorbed these sobering developments.
There are signs that they are preparing the public for the EU's
ultimate exit from Kyoto-type treaties. Hans Joachim
Schellnhuber, Chancellor Angela Merkel's climate advisor during
Germany's EU and G8 presidencies, has suggested that G8 countries
as well as China and India should adopt their own, national
climate goals and policies, a loose road map that could replace
the fading Kyoto treaty after it runs out in 2012.



What then are the chances that Europe's flagging climate policy
will survive? The prospects are rather bleak. It remains unclear,
however, whether the disarray over Kyoto and its rickety
emissions-trading scheme will discourage others from getting
their own fingers burnt.



Benny Peiser is a researcher at Liverpool John Moores University
in the U.K. and is the editor of CCNet.



Copyright 2007, National Post




-- 


Regards

Bonzo

The increase in CO2 since about 1945 has been from 0.03 percent
[of the Earth's atmosphere] to 0.038 percent, a change of only
0.008 percent. The data indicates that CO2 is not the cause

"HangEveryRepubliKKKan"  wrote
>> 1998 14.57  *********************o*****
>> 1999 14.33  *****************>>>>o
>> 2000 14.33  *****************>>>>>o
>> 2001 14.48  ************************o
>> 2002 14.56  *************************o**
>> 2003 14.55  **************************o*
>> 2004 14.49  *************************>>o
>> 2005 14.63  *****************************o**
>> 2006 14.54  ***************************>>>o
>>
>>   Look at all those "o"'s lined up there.

"Bonzo"  wrote
> The "0"'s are NOT THE DATA!
> They have created a trend which does not exist in the data.
> Voodoo statistics!

  Ahahahahahahahahaha... Stupid KKKonservative KKKlown. A trendline skirts
across the top of the data leaving equal portions of the data above and
below.  In this instane 10 dots above, and 14 below as a result of the crude
nature of ascii graphics.  Nevertheless it represents the best line that can
be fitted to the data based on minimizing the square of the distance between
the line and the real data.  It's called a least squares curve fit.

  You are completely ignorant when it comes to statistics and mathematics in
general aren't you Bonzo.

  Ahahahahahaha.. You don't know what statistics are, where it comes from,
how it is used, or how to use it, and yet in your vast ignorance, you seem
to think that you know more about science than all of the worlds scientists.

  "Voodoo statistics"  Ahahahahahahahah...  You need to go back to public
school and take a refresher course in basic technical literacy.

  Stupid... Stupid.. KKKonservative KKKlown....


"Bonzo"  wrote
> Here is the data which shows NO TREND!
>
> 1998 366.50 2.5721     14.57
> 1999 368.14 2.6148     14.33
> 2000 369.41 2.6399     14.33
> 2001 371.07 2.6672     14.48
> 2002 373.16 2.7032     14.56
> 2003 375.80 2.7487     14.55
> 2004 377.55 NA            14.49
> 2005 379.75 NA            14.63
> 2006 381.90 NA            14.54

  No?  Lets plot the data and find out shall we?  Here it is along with the
best linear fit to the data shown as "o".

1998 14.57  *********************o*****
1999 14.33  *****************>>>>o
2000 14.33  *****************>>>>>o
2001 14.48  ************************o
2002 14.56  *************************o**
2003 14.55  **************************o*
2004 14.49  *************************>>o
2005 14.63  *****************************o**
2006 14.54  ***************************>>>o

Look at all those "o"'s lined up there. The trend is up, Up, UP.

So Bonzo, who is paying you to post lies to this newsgroup?

"Bonzo"  waffled in message
>
>  Kyoto sinks Europe: Billions in costs make it more and more
> unlikely thblah,blah,blah,blah,blah,blah,blah

Tell me Bozo, what's it like marching to the beat of your own drum?