Thursday, February 15

EU's Strategy to Combat Global Warming: Billions for BS

For all the talk about saving the environment, the EU, while pointing its finger at the US for not ratifying Kyoto, has done little itself to curb their greenhouse gas emissions. It is no secret that most of the EU Member states are in violation of their agreed Kyoto Carbon Emission limits. They however have done a good deal of tinkering with greenhouse gas accounting.

The position of the EU is not without controversy in Protocol negotiations, however. One criticism is that, rather than reducing 8%, all the EU member countries should cut 15% as the EU insisted a uniform target of 15% for other developed countries during the negotiation while allowing itself to share a big reduction in the former East Germany to meet the 15% goal for the entire EU.

Also, emission levels of former Warsaw Pact countries who now are members of the EU have already been reduced as a result of their economic restructuring. This may mean that the region's 1990 baseline level is inflated compared to that of other developed countries, thus giving European economies a potential competitive advantage over the U.S. - Wiki

Unfortunately, tinkering with the numbers is not going to make the planet any cooler.

Funny thing is, Germany is surely now wishing that they had kept East Germany's carbon reductions for themselves, because they now have a problem with too much emissions:
BERLIN, June 28 — Germany, one of the biggest emitters of greenhouse gases in Europe, announced changes Wednesday that would allow increases in its emissions — a move that is expected to be challenged by the European Commission.

The German cabinet decided to exclude the coal industry from the European Union's carbon trading program, under which companies must buy permits before they can release higher-than-mandated levels of carbon dioxide into the atmosphere. The move could persuade other countries to loosen their controls, critics said.

Chancellor Angela Merkel, a Conservative, and her Social Democratic coalition partners agreed to cut Germany's emissions limit by nearly 3.4 percent from 2008 to 2012. But critics said the reductions would be ineffectual if coal — a source of some of the worst industrial pollutants — is excluded. - NY Times
I'm sorry but I do not understand how you can exclude some greenhouse gas emissions when you are talking about GLOBAL WARMING. If they want to play that game, then you could say that the US decided to exclude all its industry from carbon trading programs.

The whole point of trading carbon emissions is so that dirty industries like Germany's coal industry can purchase carbon credits because that is much less expensive than cleaning the industry itself. Instead, they can spend money to clean up other areas. (One way to account for coal's emissions would be to tax coal, which theoretically would decrease its use or fund the changes needed to make coal more 'green' or tax the coal companies. But try telling that to the thousands working in the industry.)

Germany is not the only country that is cheating. It seems that many of the EU Countries are simply underestimating their current emissions:
MANY governments, including some that claim to be leading the fight against global warming, are harbouring a dirty little secret. These countries are emitting far more greenhouse gas than they say they are, a fact that threatens to undermine not only the shaky Kyoto protocol but also the new multibillion-dollar market in carbon trading.

Under Kyoto, each government calculates how much carbon dioxide, methane and nitrous oxide its country emits by adding together estimated emissions from individual sources. These so-called "bottom-up" estimates have long been accepted by atmospheric scientists, even though they have never been independently audited.

Now two teams that have monitored concentrations of greenhouse gases in the atmosphere say they have convincing evidence that the figures reported by many countries are wrong, especially for methane. Among the worst offenders are the UK, which may be emitting 92 per cent more methane than it declares under the Kyoto protocol, and France, which may be emitting 47 per cent more. - Kyoto promises are nothing but hot air - New Scientist
Methane? Why do we not hear anything about methane emissions? (More on that in another post, but keep the following in mind: "Methane is responsible for nearly as much global warming as all other non-CO2 greenhouse gases put together. Methane is 21 times more powerful a greenhouse gas than CO2.")

The EU's numbers games does not end here. Now that they have taken advantage of 'East Germany's' unused carbon credits, they are now going to purchase more mythical Carbon credits from Russia, which has a ton of them due to the breakup of the Soviet Union and the following collapse of the Soviet Union's Greenhouse Gas manufacturing machine.

Now you would think that someone in the EU would think that sending billions of Euros to Russia is a truly stupid idea and come up with an alternative way to use that money. (Such as fining industry at the going rate of carbon credits instead of the much higher penalties that will be imposed, which is driving the need to purchase carbon credits from Russia. Or how about allowing polluting industries to replace all the light bulbs in the EU with compact florescent lights)

Funny thing is, with all the EU attention on trading Carbon credits, they must have forgotten that they were against it before they were for it.
By the summer of 2000, almost all the European countries had ratified the protocol, but the United States, Russia, Japan, Australia, and a number of Eastern European nations had not. Since the Protocol could not go into effect until 55 percent of all industrial nations contributing at least 55 percent of emissions had ratified it, there was great pressure on the United States to do so. All this came to a head in The Hague in November 2000. The U.S. delegation, handpicked by the Clinton-Gore White House, wanted very much to achieve a compromise with the Europeans that might make ratification by the Senate possible. The compromise would involve “emission trading” among nations that faced different costs of compliance, as a means of lowering the overall cost. The EU opposed it, although Europe had granted to itself the option of emission trading among European nations.

This so-called European “bubble” allowed the EU to set specific reduction quotas for each country. Some European countries were even permitted to raise their emissions over the 1990 levels, since they were still in a developing stage. Others, like Germany and Britain, took it upon themselves to take larger cuts, up to 25 percent. While this sounds like a very large reduction in emissions, it must be recognized that the choice of 1990 as the base year made it relatively easy for Germany and Britain to meet these targets. Germany had just completed its reunification and was shutting down the former East Germany’s highly inefficient industries. Britain had started to substitute North Sea natural gas for coal in its power plants, which drastically reduced the country’s carbon dioxide emissions. - New Atlantis
Now here is the part that just screams hypocrisy:
The sessions in The Hague were highly dramatic, and the conference had to be adjourned without an agreement. Had Europe compromised and permitted emission trading, as requested by the U.S., an agreement might have been possible. But western European nations, especially France, wanted to see the U.S. make painful cuts in its use of energy rather than permit the purchase of unused emission permits from Russia. The French had a point: the emission trading scheme, while it would have allowed the U.S. to sign on, was really a cop-out, since buying unused permits from Russia would mean that overall emissions to the atmosphere would not actually be reduced at all. - New Atlantis
Thanks to Europe, the US will save billions for not having to purchase the right to pollute under Kyoto. Turns out that the EU eventually agreed to carbon trading, once they realized that they would need to trade as well, with 'trade' really meaning 'to buy', and will be forking billions over to Russia. Funny how these things work out. (And they think that we are the stupid ones!)
European nations agreed to the "Kyoto" process, and have set carbon emissions limits for themselves. In order to exceed those limits, they are going to buy "credits" from Russia. These "credits" are a fictional device. The Europeans are buying permission to pollute -- from Russia, the most polluted country in Europe. Russia delivers nothing. Reuters:
"Gazprombank and Dresdner Kleinwort plan to invest in projects generating carbon credits under the Kyoto Protocol, in a Russian and east European market worth up to 5 billion Euros ($6.5 billion) through to 2012.

But Gazprombank, owned by the world's largest gas company Gazprom (GAZP.MM: Quote, Profile , Research), admitted that no projects could actually be implemented until Russia passed laws to govern emissions trading -- something it has repeatedly promised but failed to deliver."Furthermore:

"Outside JI schemes, which allow investors to book foreign emission savings as their own, experts say Russia may have as many as 3 billion tonnes of spare quotas to sell under Kyoto's terms if it passes the required laws."
Thus Western Europe itself funds the tyrannical regime that is still seeking to subvert it. As Lenin said, "When the last of the bourgeoisie is hanged, it will be a capitalist who sells us the rope." - Astute Bloggers
Now, it just might be that Russia's carbon credits might be the only ones left in Europe cheap enough for European companies to afford because, in the EU's infinite wisdom, Member states have decided that VAT (Value added Taxes) will have to be paid on purchased carbon credits. That could be as high as 25% depending on which country you are in. Here is the summary for Finland:
(Link to PWC's Carbon Trading guide - PDF link)

Is there nothing that the EU will not tax? So while the EU sells the plan as an incentive for companies to make changes and then profit by selling their remaining right to pollute, they then turn around and tax the hell out of it and thereby limiting the benefit for a company to make changes towards conservation. Businesses will still have to conserve, but the promised rewards are not as great as promised. There was an added issue in the first round in that many countries gave their companies more credits than they could have possibly used. (Cross-border trades – seller charges no VAT and buyer self-assesses for local VAT, both charging and recovering the VAT on the same return. - PDF link)

With all of this accounting games going on, you would think that truer carbon reduction methods would also be credited, such as planting a tree. Well, no.

One reason why the EU has been getting away with the juggling of carbon emission credits is simply due to the year that was chosen as a baseline. Europe has been making out like a bandit as they were particularly dirty in the year chosen, 1990.

The urge to be selfish when talking about climate change is strong. Greenhouse gases have the same effect wherever they are emitted, yet the cost of stopping such pollution is not similarly dispersed. Each country pays the full cost of controlling its own emissions but gains only a small fraction of the global benefit.

Selfishness alone, however, did not lead the United States to reject the Kyoto protocol. Sound economic policy did. The agreement is highly inefficient and inequitable.

The treaty sets targets for greenhouse gas emissions for each participating country based on its 1990 emission levels. Unlike much of the world, the United States has grown considerably since 1990, and this places it at a great disadvantage compared to countries whose economies have fallen. Those countries may even benefit under the treaty because they will have "lost" emissions.

Prosperous Western Europe has cleverly aligned itself with slumping Eastern Europe (and possibly Russia) to take advantage of the declines in emissions in those countries. Taking Europe as a whole, the region must reduce emissions only a few percent to reach its Kyoto targets.

In contrast, the United States would have to reduce emissions by almost 30 percent to reach its Kyoto targets. This means that while the European abatement program will cost roughly $5 per ton, the United States program could cost as much $100/ton. - NPR
So while these nations are emitting much less greenhouse gases, they really did not do anything to achieve these reductions. If anything, it was American actions in helping to kill off the Soviet Union that brought about this 'greening' of Europe. Shouldn't we get some credit for that?

By the time this is all done in 2012, the Kyoto Protocol might turn out to be little more than a stick to beat the US with. Unfortunately, it is going to cost businesses in Europe billions for their Governments to have the privilege. That's pretty damn sad for countries that believe that the planet is in danger of global warming.


UPDATE: 20 February 2007
I ran across this at Davids Medienkritik:

Europe 'complacent' on climate change - February 18, 2007 - European nations are not doing enough to fight climate change and should show more leadership before they criticise the US and Asia, the head of the UN Environment Program (UNEP) said on Saturday.

Achim Steiner said in an interview with Bild am Sonntag newspaper climate change has been caused primarily by carbon dioxide emissions from Western industrialised nations and it was thus their responsibility to lead the fight against it.

He said the US and Asia were now moving faster in the fight against climate change than Europe, which he said has grown complacent.

"The Americans and Asians are catching up quickly and are becoming strong business competitors (with green technologies)," Steiner said, in excerpts of the interview released ahead of Sunday's publication.

"But in Europe we've cherished the illusion in recent years that 'we've done enough'," he added.

He praised Germany, which holds the European Union presidency, for "showing initiative" but said it was not enough. "It's important that Germany move forward," he said, referring to Europe's biggest emitter of greenhouse gases.

The EU's environment commissioner earlier this month said Germany's lack of progress in cutting greenhouse gas emissions was holding back international efforts to combat global warming. - Davids Medienkritik

After all, it is the reult that matters most.

Gazprom, Dresdner to launch carbon deal - The Age, Australia
EUROPE SENDS BILLIONS TO PUTIN FOR "KYOTO CREDITS" - Astute Bloggers

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