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European struggle to agree on how to fund climate battle

Published on 20/10/2009

Brussels — EU nations are struggling to agree how to bankroll the fight against climate change, with little enthusiasm to commit to the huge sums poor nations will need, ahead of a key week of talks, a draft text shows.

The question has become vital two months ahead of a world climate summit in Copenhagen in December where leaders hope to thrash out a deal to battle global warming for years to come.

The European Union sees itself in the forefront of the global battle, but insiders are becoming less optimistic that the 27 member states, and the wider world, will be able to agree on how to fund it.

"The Copenhagen deal is hanging in the balance," British Foreign Secretary David Miliband has warned.

"It’s a real danger that the world will not come together in the way that is necessary to agree on an ambitious and comprehensive deal in December," he added.

EU nations have agreed among themselves to cut greenhouse gas emissions by 20 percent in 2020, from 1990 levels, and by 30 percent if the rest of the world agrees to do so.

However Europeans are not seeing those targets matched in many other countries and their pride in taking the lead is becoming increasingly tempered by frustration that their ambitions are not being embraced elsewhere.

A draft EU position for the Copenhagen summit, seen by AFP, is peppered with gaps where monetary figures have yet to be agreed.

One figure that remains in the text is the 100 billion euros, the estimation of what poorer nations will need annually from 2020 to fund their adaptation and mitigation efforts.

However, one of the amounts yet to be pencilled into the draft text is the overall level of public funding that would be required.

The European Commission estimates that this amount could total between 22 and 50 billion euros per year by 2020.

Calculations will also have to be made about how to fairly distribute the burden within the European Union.

One problem here is how to distribute the contribution required via some equation involving the two key factors; a country’s emission levels and its ability to pay.

Some heavily coal-dependent eastern European countries, led by Poland, are unwilling to fork out when they seem themselves as among the needy.

"Quite frankly, from our point of view it’s totally unacceptable that the poor countries of Europe should help the rich countries of Europe to help the poor countries in the rest of the world," Polish Finance Minister Jan Rostowski said earlier this month.

Europe’s frustrations are accompanied by growing fears that laxer rules outside the EU will lead to a migration of both jobs and pollution – the so-called carbon leakage effect.

One European negotiator spoke of "vague, conditional promises," from many key players.

The United States, which is responsible for a quarter of the world’s greenhouse gas emissions, is seen as a prime climate foot-dragger, and wants its cuts to begin in 2030.

Last month Fredrik Reinfeldt, prime minister of Sweden which holds the EU presidency, warned that the current levels of commitment were insufficient.

"The negotiations are going too slowly. The (emissions) reductions targets presented by different countries are not enough," he said.

Some EU nations, particularly France, are therefore looking for a Plan B in the form of a carbon tax to penalise imports from countries with less stringent emission rules.

However such a scheme is opposed by the European Commission as well as the Swedish EU presidency.

The overall goal is to limit global warming to two degrees Celsius. Scientists warn that if the world heats up by more than that a string of uncontrollable consequences could ensue.

It is in this context that European finance ministers will meet in Luxembourg on Monday followed by environment ministers on Wednesday, with a view to reach a deal at a European summit at the end of the month.

The European leaders are well aware that if they can’t arrive in Copenhagen speaking with one voice on how to tackle global warming it will be very difficult to persuade the rest of the world to do so.