EU finalizes deal to fight climate change

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STRASBOURG, France (Reuters) - The European Union finalized plans for battling global warming on Wednesday, seeking to lead the way toward a broad alliance including other big polluters like China and the United States. The European Parliament approved cutting carbon dioxide emissions to 20 percent below 1990 levels by 2020, heeding warnings of severe weather, famine and drought as the atmosphere heats up.

By Pete Harrison and Huw Jones

STRASBOURG, France (Reuters) - The European Union finalized plans for battling global warming on Wednesday, seeking to lead the way toward a broad alliance including other big polluters like China and the United States.

The European Parliament approved cutting carbon dioxide emissions to 20 percent below 1990 levels by 2020, heeding warnings of severe weather, famine and drought as the atmosphere heats up.

The deal takes on a greater importance coming just before Barack Obama assumes the U.S. presidency, amid hopes in Europe he will cooperate more on tackling climate change than incumbent George W. Bush.

"Everybody knows what Mr. Obama has set as priorities -- energy security and climate change," European Environment Commissioner Stavros Dimas said in the run up to the vote.

"Already some voices around the world are claiming they will copy our package and this is very encouraging," he added.

The advancing economic crisis had at times threatened to derail negotiations. A myriad of concessions to water down the costs for industry helped pin down a deal, although this fueled criticism from environmental groups.

Chancellor Angela Merkel and Prime Minister Silvio Berlusconi had fought successfully for industries like German steel, chemicals and cement and Italian glass and ceramics, as well as their powerful auto sectors.

Lawmakers approved measures on Wednesday to cut CO2 emissions from new cars by 18 percent by 2015, after intense lobbying by the industry won it a three year reprieve.

Auto industry group ACEA repeated calls for billions of euros in EU support to help it meet the targets.

STAND-BY

The biggest threat to a deal was the opposition of nine former communist nations, which feared the deal would ramp up costs for their highly polluting coal-fired power sectors.

To buy their support, the EU has offered a partial exemption and agreed to give them 12 percent of revenues from the EU's flagship emissions trading scheme (ETS), which makes industry buy permits to pollute.

Environmentalists vented their anger over the dilution of the EU's ambition, most of them criticizing the high levels of carbon offsets allowed and pointing to the rules on cars as the most heavily watered down.

"People will look back at 2008 and ask...knowing what they knew then, why did they not do more to save all of us from the unbearable impacts from a warming planet?" said British Green group politician Caroline Lucas.

The European Commission, which originated the climate laws in January, demonstrated its appetite for further action by adopting rules on eco-friendly design on Wednesday, which would cap the energy consumption of televisions on standby mode.

"The focus of the next two years should now be on energy efficiency and overhauling the electricity grid system," said Luxembourg's Claude Turmes who led rules to boost green energy through parliament.

(Reporting by Huw Jones, writing by Pete Harrison; editing by Sue Thomas and Anthony Barker)