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EU\'s Palacio urges emissions rights rethink

EU\ s Palacio urges emissions rights rethink
MADRID/BRUSSELS - European Energy Commissioner Loyola de Palacio said yesterday the European Union should reconsider a planned emissions trading scheme if Russia does not ratify the Kyoto Protocol on climate change.

In Brussels, however, the European Commission distanced itself from de Palacio\'s views, saying it had not changed its position on Kyoto and had no intention of doing so.

\"We strongly reject all calls to change that position concerning the ratification of the Kyoto Protocol, or the full implementation by the member states,\" chief Commission spokesman Reijo Kemppinen told a daily news briefing.

Russia shocked the EU last year by suggesting it may not ratify the treaty, which seeks to cut pollution and curb greenhouse gas emissions widely blamed for global warming.

Moscow can effectively stop Kyoto coming into force after the United States withdrew in 2000.

De Palacio told a Madrid news conference the EU should give Russia a deadline of 2005 at the latest to ratify. If it did not do so, she said, the EU should reconsider a proposed emissions trading scheme that is the centrepiece of the bloc\'s efforts to meet its Kyoto commitments.

From 2005, many plants in the EU\'s electricity, oil refining, smelting, steel, cement, ceramics, glass and paper sectors will need special permits to emit carbon dioxide.

\"We can\'t go on in this uncertain situation. If Russia does not ratify, Kyoto would not take effect. We must set Russia a deadline to decide. We are talking about 2005 at the latest,\" de Palacio said.

She said her impression was that Russia had no intention of ratifying the Kyoto Protocol.


If Russia does not ratify, the EU should in any case reduce its carbon dioxide emissions by eight percent of 1990 levels between 2008 and 2012, its Kyoto goal, but \"it should reconsider the emissions rights system,\" she added.

De Palacio voiced concern that if the EU waited too long for Russia to decide, industrial companies that will be affected by limits on emissions would move out of the bloc.

\"We can\'t wait until 2007, because the moves will have happened by then or companies will have adopted strategies for carrying out those moves,\" she said.

A \"fantastic system\" to reduce emissions would be simply to have a brutal recession, she said ironically.

\"You close down industries and we will see. Of course, we will comply with everything. Of course we\'ll reduce emissions, but that\'s not what we want,\" she said.

Spanish firms such as power utility Union Fenosa (UNF.MC: Quote, Profile, Research) have voiced concern about the proposed emissions trading scheme, fearing it would undermine their competitiveness.

It is not the first time the Spanish commissioner has waded into the Kyoto debate. In December, she said the EU had to prepare for the treaty\'s possible failure if Russia failed to ratify it.

Kemppinen said de Palacio had already agreed with her fellow commissioners on their official position regarding Kyoto, and on how to deal with hesitant countries such as Russia.

\"Should there be any other expressions by commissioners ...they express their own private opinions and they have all the right to do so,\" he said.

Story by Alejandro Lifschitz and Jeremy Smith

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