As the prospect of a global climate deal this year recedes, European governments worry that their critical industries will be left dangerously uncompetitive.
U.S. President Barack Obama will attend a global climate summit in Copenhagen next month, where he will lay out specific targets for curbing greenhouse-gas emissions, White House officials said Wednesday
— the first time the Obama administration has offered to commit to concrete goals on emissions.
While the summit isn't expected to produce a legally binding agreement, Mr. Obama's decision to attend ratchets up pressure on his administration to narrow differences with other nations over how to distribute the costs of cutting emissions.
The United Nations' top climate negotiator, Yvo de Boer, said Mr. Obama's participation in the summit is «critical to a good outcome.»
However, a summit of leaders from the Asia-Pacific Economic Cooperation forum, including Mr. Obama, earlier this month dropped plans to reach a binding agreement in Copenhagen, and instead pledged what they called a «political framework» for future negotiations.
European Commission President Josй Manuel Barroso is now also talking about Copenhagen as being «a springboard» for a new treaty, possibly in 2010, after pushing hard for a binding deal this year.
The European Union agreed last year on a set of rules to cut carbon-dioxide emissions by 20% of 1990 levels by 2020. A change in the EU market for allowances to emit carbon dioxide — called the Emissions Trading System, or ETS — will play a crucial role. According to the new rules, from 2013 many industries will have to start buying part of their rights to emit carbon dioxide, rather than getting them free.
European governments worry that if the rest of the world is operating with looser controls over carbon emissions — and therefore with cheaper energy as well — the EU commitment will hamper the competitiveness of key industries, or that they will move their production out of the EU.
The ETS rules approved last year did make a provision for a delay in reaching a comprehensive agreement. Under that plan, major industrial sectors competitively disadvantaged by the ETS regime could be given leeway on their allowances.
Eligible industries include those for which the cost of emissions would sharply increase production costs, or whose products are heavily traded internationally, or both. Businesses as diverse as oil and gas extraction, paper-making, musical instrument and underwear manufacturing ended up being eligible.
The breaks will be crucial for certain industries, even though only the best-performing plants in each sector will get 100%-free allowances, with the rest getting some lower percentage.
«It can be a question of survival for some companies in those sectors," said Folker Franz, senior adviser for environment issues at BusinessEurope, the European Union's largest business lobby.
French President Nicolas Sarkozy has proposed a tariff on certain goods imported to the EU to offset the benefits foreign manufacturers could experience by not having to face emissions standards as stringent as Europe's.
Such a tariff could «prevent unfair competition, it could finance part of the new green industry, and it could encourage other nations to adopt similar [carbon reduction] targets," said Antonio Dai Pra, an energy and environment consultant at European Consulting Brussels.
In the U.S., Mr. Obama intends to propose that the U.S. cut its greenhouse-gas emissions by 17% from 2005 levels by 2020, and by 83% by 2050, officials said. Those proposed reductions are consistent with targets laid out in a bill passed by the House of Representatives in June. Senate leaders have said the full chamber won't take up climate legislation until the spring.