BRUSSELS, (Reuters) – European Union leaders fell out yesterday over how to split the bill for helping poor countries tackle global warming in a deal to be agreed in December in Copenhagen.
“We have not solved this,” Swedish Prime Minister Fredrik Reinfeldt told reporters. “We will try to go for a strong mandate so we can get a move on the process, which is now standing much too still in the world.”
The two-day EU summit was also split over how to deal with so-called “hot air” — eastern Europe’s 17 billion euros ($25 billion) of excess carbon permits that threaten to undermine any future global pact on climate change.
EU leaders hope to agree a negotiating mandate for the Copenhagen talks to find a successor to the Kyoto Protocol, the United Nations anti-climate change scheme expiring in 2012.
Success in Copenhagen is likely to hinge on money.
Developing countries say they will not sign up to tackling climate change without enough funds from rich nations, which bear most of the responsibility for damaging the atmosphere by fuelling their industries with oil and coal over decades.
Europe’s rich nations accept the demand, and EU leaders are preparing to back an estimate that developing nations need some 100 billion euros a year by 2020 to tackle climate problems.
But they are unlikely to agree how much should come from the public purse worldwide, rather than from industry, or how much of that the EU should pay.
Leaders were also divided over the wisdom of showing the EU’s negotiating hand so soon before Copenhagen.
“For tactical reasons some of my colleagues think we should keep our wallet in the pocket for some time,” Danish Prime Minister Lars Lokke Rasmussen told reporters.
“I disagree and I really, truly hope we will be able to make an agreement here in Brussels about concrete figures.”
Developing countries might use such money to curb emissions from their dirtier industries, to develop drought-resistant crops or to find new sources of water as old ones dry up.
But nine east European countries question the fairness of such handouts, observing that some wealthier regions in developing countries like China are better off than parts of poorer European states such as Romania.
The leaders will seek to agree an acceptable way of protecting those nine EU states from any unbearable burden on their economies, hit hard by the financial crisis. “We shouldn’t agree on something the effects of which we will not be able to deal with,” Polish Prime Minister Donald Tusk told reporters. “I think today the voice of those countries who are economically weaker will be heard.”
But he ruled out threatening a veto, as Poland has done before when faced with high costs for protecting the climate.
Some said it was pointless for the EU to agonise over the finer financial points, while other powerful economies had offered scant detail of their plans.
“The EU has to make clear its ideas, but it is crucial that the United States and China also make clear what they are willing to contribute,” German Chancellor Angela Merkel said.
Further discord between east and west emerged over how to treat carbon emissions permits issued under the Kyoto Protocol once it expires.
“The nine countries show a big determination on that issue,” said Poland’s minister for Europe, Mikolaj Dowgielewicz. “It will be very difficult to reach a compromise if rich countries do not display elementary decency.”
The eastern European states, Russia and Ukraine hold spare permits for about 9 billion tonnes of carbon emissions, left over when their economies collapsed after communist rule ended.
The spare permits, known as AAUs, can be sold to big polluters such as Japan for about 10 euros per tonne.
EU member states, mostly eastern, have sold 80 million tonnes of AAUs in confirmed deals so far and hold a potential of 1.7 billion more, said Trevor Sikorski, head of carbon research at Barclays Capital. Poland alone has about 700 million.
The eastern European countries want to keep selling AAUs under the deal that replaces Kyoto, but critics say any more such arrangements will render the agreement ineffective and have dubbed them “hot air”.
“Carrying over emissions rights through 2020 would result in an emissions decrease of only 6 percent total, in sharp contrast with the 25-40 percent reductions scientists say are required … to avoid dangerous climate change,” said an analysis this week by Point Carbon consultancy.
