Europe Adopts Climate Emissions Trading Law
BRUSSELS, Belgium, July 22, 2003 (ENS) - European Environment Commissioner Margot Wallstrom today welcomed the final adoption by the European Council of Ministers of an emissions trading law for the European Union. The new legislation will give carbon dioxide a market value across the European Community from January 2005. Next May 10 new countries will join the 15 current EU member states, and the bloc will extend from Poland in the east to Ireland in the west.
Calling European Union "world leaders in applying emissions trading," Wallstrom said the new law has enabled the bloc to act swiftly to meet its emissions limits under the Kyoto Protocol.
"This will mean that other countries, for example Russia, will benefit from our EU emissions trading market," Wallstrom said.
The environment and energy ministers of the 25 current and future EU member states put more pressure on Russia to ratify the Kyoto Protocol during their three day informal council meeting in Montecatini, Italy over the weekend.
Since the United States has declined to ratify the international treaty governing the emission of six greenhouse gases, the ratification of Russia, which accounts for 17 percent of emissions, is needed to bring the protocol into force.
The rules for entry into force of the Kyoto Protocol require 55 countries that signed the agreement to ratify it, including industrialized countries accounting for 55 percent of that groupís carbon dioxide emissions in 1990.
Russia promised in September 2002 to ratify the protocol, but has been stalling ever since, possibly in hopes of prying more financial advantages from the European Union.
The European ministers for energy and environment met at Montecatini to state that the integration between energy and environment can be a source of opportunity and development.
The new law will, for the first time, set limits on the emissions of carbon dioxide from energy sectors of the European economy. Companies reducing emissions to a level below their limit can sell this over-achievement to other companies that are above their emissions limit, or save the credits for future use.
A company's strategy will depend on the price at which emission reductions are traded.
In this way, Wallstrom said, the EU emissions trading scheme will allow emission reductions to take place at minimum cost to the economy, and will also bring climate change into the boardroom through giving carbon reductions a value.
The Commission will assess the coverage of the new law in 2004 and 2006 with a view to the possible inclusion of other sectors such as the chemical, aluminium and transport sectors.
The initial focus of the new law is on carbon dioxide. However, from 2008, member states may extend the coverage of the trading scheme to emissions of other greenhouse gases - methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride - from aluminium and chemicals production.
"When the European Union signed up to the Kyoto Protocol," Wallstrom said, "we knew that this commitment would require solid action to follow. The EU emissions trading scheme demonstrates the Community's willingness to take such action which is not only ambitious in its scope but swiftly decided upon. I hope that other countries become inspired by our progress, in order that global action is taken to protect current and future generations from climate change."
EU member states are expected to implement the provisions necessary to comply with the new emissions trading law by December 31, at the latest.