Italy makes climate deal conditional

Premier Silvio Berlusconi on Friday said he was satisfied that Italy's requests had been accommodated in a compromise on the European Union's climate package. "Once again our tactical ability has paid off," he said after the leaders of the 27 member states hammered out a new deal on the climate package that takes the global economic crisis into account. Berlusconi said Europe was now at the forefront of the battle against climate change but insisted that it could not be ''left to foot the bill on its own''. "The other carbon-dioxide emitting countries must also make a commitment at the Copenhagen world climate conference in 2009," Berlusconi said.

The new deal accommodates two Italian demands that Foreign Minister Franco Frattini described as deal-breakers earlier this week. In one new clause, the entire climate package will be reviewed in March 2010 after the Copenhagen conference in December 2009 in order to ensure Europe is not isolated, and therefore penalised economically, in its fight against climate change.

In a second major concession to Italy, the Italian manufacturing sector will receive free 'polluting permits' when European industries and companies have to start 'paying to pollute' via an auction system in 2013. "No Italian jobs will be put in jeopardy and the manufacturing industry will be fully safeguarded," said Italian EU Affairs Minister Andrea Ronchi. Renewable energy credits generated by Italian-funded projects in non-European countries, such as Albanian windfarms, will also be viable on the European market until 2016.

Germany, Poland and other eastern European countries who had expressed concerns about the package also found satisfactory compromises on Friday. "We reached an accord that on one hand stands firm on the aims of greenhouse gas emission reduction and on the other takes into account the needs of the various member states, emphasising the sustainability of the measures by the various national economies as Italy had requested," Italian Environment Minister Stefania Prestigiacomo said.

French President Nicolas Sarkozy, who led the talks, thanked Berlusconi for helping to reach the deal quickly, while Berlusconi paid tribute to Sarkozy's "intelligence and dedication".

On Thursday the Italian premier had repeated a threat to veto the package if Italy's demands were not met, and said in a frank exchange with journalists that he thought it was "absurd" to be talking about carbon emissions in the face of the more pressing financial crisis. "It's like someone with pneumonia thinking about having a hairdo," he said.

The climate package sticks to its original aims of a 2020 deadline to reduce greenhouse gases by 20% below 1990 levels through a 20% increase in the use of renewable energy and a 20% boost in energy efficiency.

However, environmental groups including Greenpeace, WWF, Oxfam and Friends of the Earth branded the new deal a "failure", saying it was now dramatically watered down with compromises.

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Comment from Benny Peiser: As I expected, the EU climate summit ended with an extremely woolly compromise. While European leaders hailed the agreement as 'historic,' radical environmentalists denounced it as a complete and utter failure. As usual, the political reality lies somewhere in between these extremes. On the whole, however, I would suggest that the EU's climate rebels, Italy foremost, won the day.

Italy's demand for a revision clause that will make the EU climate package conditional, was unanimously agreed yesterday at the EU summit in Brussels yesterday. Crucially, Italy's 'red line,' i.e. its demand for a revision clause that will make the EU climate package conditional, was unanimously agreed yesterday at the EU summit in Brussels yesterday. It is now fully incorporated in the new EU climate package: The crucial paragraph reads: "The Commission shall submit to the European Council in March 2010 a detailed analysis of the results of the UN climate conference in Copenhagen, particularly in relation to the goals of reducing emissions by 20% to 30%. The European Council will, on this basis, make an assessment of the situation, including the effects on the competitiveness of European industry and other economic sectors." (Paragraph 23 of the EU summit declaration).

In other words: If the Copenhagen Climate Conference in December 2009 fails to agree on a post-Kyoto deal, it is almost certain that the EU climate package and its conditional targets will be further watered down accordingly. As a result of this new revision clause, the EU has ensured that any enforcement of the EU climate package ultimately depends on the outcome of future international climate negotiations. As Italy's Prime Minister, Silvio Berlusconi stressed yesterday, his shrewd strategy seems to have paid off.





OBAMA WARNS: USA MAY NOT JOIN GLOBAL CLIMATE DEAL

President-elect Barack Obama's administration is prepared to embrace mandatory limits on greenhouse gas emissions in the United States but will push through Congress a new international climate treaty only if China and other big emitters join in a "global solution," Sen. John Kerry warned at the latest round of climate talks Thursday in Poland.

Kerry (D-Mass.), widely viewed as Obama's unofficial representative at the UN meeting, praised China-which recently surpassed the United States as the world's biggest greenhouse gas producer-for taking a variety of climate-friendly actions, including establishing auto emissions standards tougher than those in the United States and setting ambitious goals to improve energy efficiency.

But unless China and other powerhouses in the developing world agree to quickly follow the U.S. toward large-scale emissions cuts, "there's no way for us to get from here to there" in terms of holding climate change to less than catastrophic levels, he said at a news conference.

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RUSSIA WARNS: WE MAY NOT JOIN GLOBAL CLIMATE DEAL EITHER

Russia may not join a new global deal to fight climate change if it is against Moscow's interests and will set a national mid-term target for reducing greenhouse gas emissions next year, an official said on Friday. "If the conditions for the international agreement are not favorable for us we may not join such an agreement," Alexander Pankin, deputy head of the Russian delegation at U.N.-led December 1-12 climate negotiations in Poland, told Reuters.

If a new U.N. climate pact meant to be agreed in Copenhagen at end-2009 was unfair and failed to set comparable commitments for countries according to their economic and social standing, Russia would not sign, he said. "If you are better off than me, why should I make a stronger commitment than you," he said.

Pankin said Russia's ambition was to stabilize emissions at around 30 percent below 1990 and then reduce them further but did not give a percentage about possible cuts by 2020. "We will have our national commitment. We will see what is achievable for Russia, we will do it at a government level and we will say this is the Russian target," he said. "Definitely we have to do it within the next year."

Russia would set its own "achievable and realistic" target and would not tolerate pressure from the European Union or others for emission cuts of 20 or 30 percent by 2020. The EU leaders approved on Friday a 20-percent target by 2020. "We take our national actions not because there's international pressure on us, we take action because we want to live in a cleaner world," Pankin said.

Russia, the world's number three greenhouse gas emitter behind China and the United States, ratified the current U.N. Kyoto Protocol in 2004 only after years of debate about whether to take on targets for greenhouse gas emissions.

Fears of global recession have now made many rich nations reluctant to launch costly new projects to fight climate change, or push ahead with ever deeper greenhouse gas cuts.

Pankin said talking about a collective mid-term global target for curbing emissions was not realistic because many countries were not ready to commit to combating climate change with concrete actions. Emissions in the oil and gas-rich Russia, mainly from burning fossil fuels, have plunged by about a third since the collapse of Soviet-era smokestack industries. Its goal under Kyoto is to keep emissions below 1990 levels until 2012.

Moscow has previously feared its emissions may surpass 1990 levels in coming years because of strong economic growth. But the financial crisis has hit growth and Pankin said emissions would likely fall due to declining demand for commodities.

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CLIMATE POLICY: THE LIGHT AT THE END OF THE TUNNEL IS A COAL TRAIN

Peering nervously into the dark tunnel of climate change policy, Europe's political leaders hesitate. Gordon Brown says he can see a chink of light in the distance and he stumbles into the gloom. Silvio Berlusconi says the British are silly and declines to follow. Angela Merkel, the German Chancellor, says she can see the dim glow but wonders whether it might be a train.

She is right; the light at the end of the tunnel is a coal train, a diesel juggernaut pulling 100 wagons laden with dusty, carbon-rich but very cheap fuel. Even as European Union leaders were preparing to meet in Brussels on Thursday for talks on cutting carbon emissions, the world's energy marketplace was rushing towards them, pistons pumping and whistle blowing.

Can they hear it? Europe's CO2 emissions are falling. Deutsche Bank is forecasting a 10 per cent fall in emissions in 2009 against last year's level. The price of coal, gas and oil is cheaper by the day and, even more embarrassing, the price of a permit to emit a tonne of carbon has collapsed on Europe's emissions trading system.

With fuel prices as they are, the margin from burning coal is unbeatable, even after adding the cost of buying carbon allowances at _14 a tonne. According to Deutsche Bank's calculations, a fuel switch from dirty coal to cleaner natural gas would require a carbon price of between _25 and _30 a tonne. Estimates of the long-running carbon price needed to justify investment in carbon capture and storage technology vary between _40 and _50 a tonne.

Forget it. This much-lauded technology of stripping out CO2 and pumping it into spent oil wells is at the heart of many cherished plans and projections, but where is the full-scale demonstration plant? Where are the wagons of cheap coal being transformed economically into kilowatt hours with carbon dioxide piped harmlessly into subterranean pits?

For the next two or three decades, the picture is emerging of coal for the poor, more expensive gas and nuclear power for those on middle incomes and wind turbines for the super-wealthy. Wind is a fringe benefit for Britain: it works at the margins but it is too unreliable and expensive to replace the 22 gigawatts of baseload power that this country needs if it is to replace elderly power stations over the next 15 years. Nuclear will fill some of the gap but Europe's nuclear industry is just recovering after decades of ruinous neglect. For an electricity generator, the market signal is absolutely clear: burn coal, make cheap power and speed the economic recovery.

The market wants to go with coal and there is the rub. Having erected this fantastic mechanism - the emissions trading system - and puffed its merit on political platforms worldwide, Europe's leaders are now embarrassed, frantically brushing the coal dust off their cuffs. The original idea behind the scheme was that it puts a price on carbon by enabling companies to trade permits, known as EU allowances to emit CO2. These allowances were issued free by governments in the early stages of the ETS. Too many were issued and falling industrial output now means that companies need fewer of them. Unless governments drastically curtail the number of permits in the future by forcing companies to pay for them, the cost of carbon pollution will continue to fall. Deutsche Bank reckons a decline to less than _12 a tonne is possible. but the auctioning of permits will push up power prices as the recession deepens. A politically dangerous strategy.

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Global cooling hits Britain

Raw Arctic winds have left Britain shivering in its coldest start to winter for three decades. According to the Met Office, the average temperature for the first third of December has been 1.7C (35F), well down on the long-term average for this time of 4.7C (40.5F). The bitter cold is a rude reminder of what winter used to be like and in stark contrast to the recent run of remarkably mild winters, when trees hung on to their leaves well into December and frogs were seen spawning in ponds. An early taste of winter came with the freakish snows of October, and this month could prove to be the worst month of the year for underpar temperatures. The last time that the country suffered such an outrageous early winter bout of cold was in December 1976, when the average temperature was a bonechilling 0.8C (33.4F).

Much of the driving force behind this recent cold is the jetstream, a ribbon of winds a few miles high that blow eastwards around the globe and are generated by a battle between Arctic air col-liding with warm subtropical air. Because the jetstream has swung south around the UK, it has left the country under a mass of frigid air.This pattern has been locked in for some time, and although there will be some respite this weekend, with an intrusion of milder, wetter Atlantic air, the cold is expected to return next week. The jetstream is believed to be behaving like this because of events thousands of miles away, in the Pacific Ocean. For more than two years, the tropical waters of the Pacific have turned unusually cool, a phenomenon called La Ni¤a. This has upset the pressure systems across the Pacific and knocked the jetstream off course.

Like a wave rolling around the world, the jetstream was shunted farther south than usual around Britain. This gave us the past two soaking-wet summers. The same jetstream pattern tends to produce a cold, dry start to the winter but ends much milder and wetter in late winter and early spring. Hence the Met Office is sticking by its seasonal forecast, which predicted the cold start to the winter, followed by milder conditions during January and February, although interspersed with cold snaps at times. And for the past two years its winter long-range forecasts have proved correct.

"This has been an unusually long episode of La Nina, and could last well into spring," Adam Scaife, of the Met Office, explained. "It pushes the probabilities towards a drier, colder early winter and a warmer, wetter end to winter - but can't guarantee it because all these signals can be outweighed by atmospheric chaos." In other words, the day-to-day weather throughout winter can still blow hot and cold.

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Road congestion scheme knocked on the head in Britain

It was the "Green" alternative to road improvement. It had already failed in London

Road pricing, the Government's favoured policy for dealing with congestion, has been roundly rejected in a referendum in Manchester. There now appears little chance of any pay-as-you-drive schemes being introduced for the next decade at least. Manchester's proposal for peak-time tolls of up to 5 pounds a day was defeated by 4 to 1. The scheme was rejected in separate votes held in all ten Greater Manchester boroughs. Just over a million people voted, 53 per cent of the 1.9 million balloted. Electors were not persuaded by the promise of 1.5 billion of government money for public transport and 10,000 extra jobs.

The result is undoubtedly a severe embarrassment for the Government, which has created a 2 billion Transport Innovation Fund to reward councils that introduce pricing schemes to reduce congestion. The Department for Transport said last night that the rules of the fund would remain. They state that any council bidding for a share of the fund would have to introduce a form of "demand management", such as congestion charging or a levy on workplace parking spaces. Other authorities that had been considering charging schemes distanced themselves from the policy after hearing the Manchester result.

Andrew Carter, leader of Leeds City Council, said: "We are doing a survey but we are a million miles from having any recommendations. I don't like the blackmail and the bullying. The Government must rethink its policy of making the funding conditional on demand management."

Cambridgeshire County Council, which has proposed a charge of up to 5 pounds to drive into Cambridge in the morning at peak times, also retreated.Matt Bradney, the council's cabinet member for infrastructure, said: "Now that congestion charging has been proven so unpopular, we think the Government should not be putting the handcuffs on us. We are urging it to change the rules of the fund." The West of England Partnership, representing four councils in the Bristol area, said it was still considering a charging scheme but the Manchester result "highlights certain challenges we might have".

Labour politicians in Manchester, working closely with the DfT, had tried everything they could to make the congestion charge attractive to the majority. Charging would not have started until 2013, by which time 80 per cent of the public transport improvements would have been completed. There would have been discounts for the low-paid and exemptions for areas that would have to wait longer for improved public transport. Only one in ten people would have paid the charge and no drivers would have been affected in two thirds of households. A spokesman for the "yes" campaign blamed the downturn in the economy for the strength of the "no" vote. "People were not willing to embrace an additional charge when they were worried about their jobs," he said, "even though only a small minority would have paid."

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