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Emission trading splits Berlin coalition

Published on 26/02/2004

26 February 2004

BERLIN – Germany’s centre-left coalition is involved in an ongoing dispute on emission trading – one of the main instruments of the Kyoto Protocol on climate protection.

At the centre of the conflict are Environment Minister Juergen Trittin, a longtime anti-pollution campaigner from the Green party, and Economics Minister Wolfgang Clement, a Social Democrat from the Ruhr area – heartland of Germany’s coalmining industry.

At issue is emission trading, designed by the architects of the Kyoto Protocol to reduce carbon dioxide emissions where it is most cost effective. A total of 2,629 companies in Germany, mainly large cement and coal-fired power stations, receive a limited number of emission certificates.

Companies emitting more CO2 than the allocated figure have to buy additional rights on the international emission trading market. Those emitting less, can sell the surplus. Germany has set itself the ambitious target of reducing greenhouse gases by 21 percent by the year 2012 compared to the 1990 levels.

Trittin wants industry to reduce pollutants by 3.4 percent annually starting next year, industry wants it to start from 2008.

Clement, the coalmining lobby, big industry and the unions have formed an unusual coalition fearing that the Green lobby is trying to push through structural changes in the energy mix via new regulations on investments by making the relatively low emissions from gas- powered stations the norm.

Industry is arguing that thousands of jobs in the coal and steel industry could be lost and that Germany has already done more for climate protection than any other European Union member by already achieving 19 of the required 21 percent reduction in Greenhouse gases.

But retorts Christoph Boehringer, of the Mannheim Centre for European Economic Research (ZEW), Trittin “must stay hard”. “The more emission certificates given to industry the more carbon dioxide will have to be saved by private households and traffic which is more harmful to the economy as a whole”.

Gernot Klepper, an economist at the World Economic Institute in Kiel, says the chemical industry could in effect suffer because it will not be given any emission certificates and could therefore also not sell any certificates on the international emissions trading market that is estimated to be worth billions of dollars.

Clement and Trittin met in Berlin until late Tuesday in a bid to bridge their differences. Trittin’s spokesman confirmed only afterwards that there had been some agreement on broad outlines. But time is running short.

The EU members have to submit by 31 March this year their National Allocation Plans (NAP) for the emission certificates to the European Commission. In terms of the NAP national parliaments have to decide on distribution of emission rights between private households, traffic, business and the energy industry.

“We must limit the warming of the earth’s atmosphere to two degree Celcius by the end of this century,” Trittin says in presenting his arguments, accusing industry of breaking voluntary pledges and “lying as best as they can”.

The dispute comes only days after the Swiss University of Freiburg warned that the record summer temperatures in Europe of last year could soon become normal.

In the latest edition of Geophysical Research Letters magazine, the university’s climate researcher Martin Beniston writes that temperatures in Europe could rise on average by four degrees Celcius by the end of the century.

Beniston based his assumptions on weather patterns of the past century and comparing these with temperature extremes on the basis of computer simulations, saying last year’s heat wave was just an indicator of what Europeans could be faced with.

Subject: German news