From: Aoife White, Associated Press
Published March 6, 2007 12:00 AM

EU Commission President Says That CO2 Cuts Will Add Costs to Economy

BRUSSELS, Belgium -- EU targets to cut carbon dioxide emissions will add costs to the European economy in the short-term but these will be outweighed by the greater cost of doing nothing, European Commission President Jose Manuel Barroso said Monday.


EU leaders will on Thursday and Friday vote for new targets to cut CO2 emissions by 20 percent by 2020, promising to go further if other world regions join them.


But Europe's major business lobby BusinessEurope said it was worried about a unilateral target, saying it could seriously damage competitiveness if others do not follow and could set the bar too high for a global deal.


Barroso, however, said other regions were coming round to the importance of tackling climate change.


"It's clear that the United States will change to a more determined position of climate change. It's a question of time," Barroso said.


He said, even within Europe, countries had different levels of enthusiasm, "but no one now is really able to oppose it."


"To have ambitious targets on climate protection is a cost, but the question is what is the bigger cost: to do nothing or to make these changes now?" he told a Brussels conference organized by London-based think-tank the Centre for European Reform.


"We are convinced that if we follow this line, the costs that we are asking our economies to bear are much less than the cost those economies will pay if we do nothing," he said.


Barroso said Europe could create jobs by turning itself into a low-carbon economy, saying it could grab a first-move advantage by creating a market for renewable energy.


"It's a good trade-off and it's good also from the economic point of view," he said. "It's not putting the green agenda against the competitiveness agenda."


BusinessEurope, in a letter to German Chancellor Angela Merkel who will lead talks later this week, said EU companies were also very concerned about a mandatory target to generate 20 percent of all energy from renewables by 2020.


Nick Campbell, who chairs the lobby's environment group, told reporters that the target was unrealistic and "a step into the unknown" because no one had ever assessed the impact on European business.


BusinessEurope said the renewables target would require massive new investments in power grids that could take up three quarters of all funding in the sector.


The group praised nuclear power, saying it had a "very strong contribution" to make as a non-CO2 form of power. It called for steps to increase the amount of electricity generated from nuclear from the current 32 percent to 40 percent by 2030, saying this would aid energy-intensive industries.


France's European Affairs Minister Catherine Colonna said France would push for the summit to set a target above 20 percent for "non-carbon" energy and a sub-target for renewables. France generates around three-quarters of its electricity from nuclear and is home to the world's largest builder of atomic power plants, Areva.


"Renewables are part of the solution, but just a part," she told reporters. "Clearly nuclear forms part of the non-carbon fuels."


The European Commission president also said he was determined push a plan to split up large energy companies' control over the power grid to solve problems of overcharging, lack of competition and under-investment identified by antitrust regulators.


"We know it's difficult, we know there is strong resistance from companies in Europe," Barroso said.


But "full ownership unbundling" was still the best option, he said, even though the European Commission had put forward another solution that would allow companies keep owning power networks although they could not operate them. This would require stiff regulation, he warned.


If EU nations fail to decide this week, regulators can still push ahead to solve the problems by taking cases against specific companies, he said, adding that will create more uncertainty because the courts will have the final word.


"Do you want it to go as is and we have a case-by-case approach and we are waiting every time for the next decision of the European Court of Justice after an infringement procedure?" he asked. "Or do you prefer a stable system that is the best way for Europe to give long-term indications for investors?"


Separately, the European Commission published the results of a telephone survey on Europeans' view on climate change. Coordinated by The Gallup Organization, the 25,800 randomly selected people were polled in all 27 EU nations between Feb. 9 and 15. No margin of error was given.


Half said they were very concerned about the effects of climate change and global warming with people in Spain, Cyprus, Malta and Greece -- nations on the hotter, southern edge of Europe -- saying they were most worried.


Eighty-three percent said they agreed that the EU should set a minimum percentage for renewable energy while 61 percent said the share of nuclear energy should be decreased because of nuclear waste and the risk of accidents.


Source: Associated Press


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