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Europe Rewired: A Giant Awakens

EU nations are taking slow steps toward an integrated energy market, but they are many paces ahead of U.S. efforts.
Fortnightly Magazine - February 2004

a price on a ton of carbon that will provide signals to the people making decisions."

There will be winners and losers. Among those nations that may see a real economic benefit are the newest members of the EU, those Eastern European states where the collapse of manufacturing has brought an associated reduction in carbon emissions.

Eva Snajdrova, head of the climate change unit of the Czech Republic's Ministry of Energy, reported that the nation's 1990 baseline for CO2 was almost 190 metric tons, but just 141.8 metric tons in 2000. "The Czech Republic has reduced its emissions of CO2 by approximately 25 percent in comparison to 1990 levels, which puts it in a very different situation than the current members states who are obliged to reduce emissions from the very start," she notes. That means the government won't need to impose new restrictions on industry, and companies will have a chance to recoup some losses through the sale of credits.

A key to success of the program will be allowing widespread trading among companies and across borders, says the European Commission's Hartridge. She termed Phase I of the plan, lasting from 2005 to 2007, the time to "learn by doing." Regulators will allow some deficiencies to be made up from purchased credits or through payment of fines of up to 100 Euros per ton. Member states may auction up to 5 percent of their allowances during Phase I.

Beginning with Phase II in the 2008-2012 period, violators can expect to see their names published, but more than 10 percent of available credits may be auctioned.

"The greenhouse gas market can't be seen as a way for people to buy out of their commitment," Marcou concludes. "It must lead to real reductions." -A.O'D.

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