Red, Green, and Blue

After committing to the formation of a climate change fund for the poor countries at the 2007 Bali conference, the European Union is finding itself in a fix over how to raise the billions needed to assist the poor countries acquire the new cleaner technology from the developed nations.

In a meeting held at Brussels, the EU nations failed to build consensus over the amount of funds they were willing to commit for the promised climate change fund. Questions like which nations contributes how much, how would this affect the already recession-hit economies and will the United States and advanced developing countries respond in kind, remained unanswered meaning that there was no agreement reached.

The issues which form the core of this problem are: No indication from advanced developing countries to commit to mandatory emissions reduction and thus unwillingness from the developed nations (and their citizens) to unilaterally commit to stricter emission reductions; secondly, during this phase of economic recession there is huge shortage of credit around the world and governments are reluctant to invest in other countries or international projects and lastly, differences over the principle of ‘polluter pays’.

EU heavy weights, Germany and France have refused to dole out more money to an international climate fund aimed at helping developing and poor countries acquire clean technology. Europe has been looking to the United States to implement it proposed cap and trade scheme hoping the Obama administration would then contribute monetarily to the fight against climate change.

With price of carbon credits slipping in the international markets and no sign of any rise in demand given the low production rates due to the economic recession, there has been considerable reduction in revenues from the Emissions Trading System. Then there is lack of consensus among the EU members themselves.

Poland, along with few others, wants that it be granted the right to use its vast coal reserves to generate power and fuel its economic growth. Renewables are still quite costly and moving from indigenous coal reserves to less polluting but imported natural gas from Russia would mean increased dependence of Poland on Russia.

Europe has also proposed that an international carbon tax be introduced replacing the Clean Development Mechanism and that advanced developing countries like China and India commit to mandatory emission reduction targets. Both the demands have thus far been rejected by the governments of China and India. China has also rejected the idea to tax goods that the developed nations import from developing countries especially China.

With developing countries refusing to act on reducing their carbon emissions and United States not yet ready with its cap and trade scheme or the carbon tax legislation, Europe has backed out from contributing to the climate change fund fearing that it might face a backlash at home.

Image: Opendemocracy (Creative Commons)

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