Friday, February 09, 2007

Our Enviromental Policy is Green Like Martians

European Commission released the results of its study on reducing emissions from cars after long negotiations between the environmentalist lobby and the mighty auto industry. Result was another classical European policy which promised a lot but delivered a compromise which did not satisfy both of the parties.

European commission proposed 130 grams of CO2 emissions per kilometer, as opposed to 140 grams of the voluntary target set by the industry and 120 which was proposed by the
Environment Commissioner Stavros Dimas.

The industry is playing their best card in hand, i.e. employment. Their argument is the following, more research on fuel efficiency costs more, which would increase the cost of the cars, and in order to compensate for this increase they would have to shift their production to lower employment cost countries (this is what an average European fears most, and will play good in the elections).

But they are wrong. It is what I exactly mean when I say that the solution of global warming is possible only when the citizens are willing to either pay more (for the same performance auto) or make some sacrifice from the performance (an auto with lower motor capacity) for the same amount of money. We will see how auto industry's bluff will play in public opinion.

This compromise reminded me another European initiative which promised so much for reductions in CO2 emmisions, and failed to deliver anything, namely European Union Emmsion Trading System.

Now there are mainly two methods of dealing with, mainly industry, emissions. First one is taxing the companies. Companies want to minimize cost, and maximize gains. This method provides an incentive to cut emissions in order to minimize costs.This does not go down good with the neo-liberal rhetoric which is leading the wave in western world.

Second option is setting limits for carbon emissions and creating a market where these emissions could be sold. This method is clearly superior to the tax scheme. Reason is obvious, if a company emits less than the limit the cost is minimized (i.e. 0) and it can make money by selling the extra emission to companies who emitted more then the limit. So there is another incentive, to make money.

European Union set up such a scheme on 2005. Everything looked great, the Europeans who introduced the word Green to the politics, were leading the way again. However the industry and government relations spoiled all once again. The governments gave away emission tickets for free (rather than auctioning them), the limits were set on based on the amount of emissions from previous years (rather than based on emissions goals, and which meant the big polluters were allowed to pollute more) , and the limits were more than what the polluters were producing (which meant that the polluters who did nothing against pollution were making money by selling emission rights to those who were trying to reduce their pollution, which is some sort of subsidy to the polluters.)

This report by Climate Action Network for Europe, a network of non governmental organizations demonstrates the shortcomings of the execution of this scheme very well.

Lets hope that the European public does not fall for the false argument of the Auto Industry, and the reductions scheme shares the failure of EU Emission Trading System.

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