By Gabriela Baczynska
WARSAW, Nov 5 (Reuters) - Seven eastern members of the
European Union on Wednesday upheld a joint stand against parts
of the bloc's climate package, which they fear could harm their
economies, their leaders said.
Poland, Hungary, Slovakia, Estonia, Lithuania, Latvia and
the Czech Republic, which became EU members in 2004, met in
Warsaw to discuss further cooperation on the climate plan, which
aims to curb emissions of greenhouse gas carbon dioxide (CO2).
"We want to continue our cooperation and jointly stand for
solutions enabling us to accept the package," Poland's Prime
Minister Donald Tusk told a news conference after the meeting.
The countries worry the package, which must be approved by a
unanimous vote at an EU summit in December, would worsen an
economic slowdown expected in the region due to the global
financial crisis.
Tusk also said he got backing for a proposal Poland made in
Brussels on Tuesday for upper and lower limits to be imposed on
the price of permits to emit CO2 -- a "price corridor" -- under
the EU's Emissions Trading Scheme (ETS), the flagship of the
bloc's efforts to combat global warming.
"We agreed the price corridor is very important. Many
countries (...) have currently suffered speculative attacks on
their currencies. Imagine what would happen if the CO2
auctioning system was attacked," Tusk said.
The Polish proposal is controversial, however, and many
policymakers and traders are likely to oppose the plan as
introducing excessive political interference into the trading
scheme, which may then start to appear more like a carbon tax.
The ETS accounts for more than 40 percent of total EU
emissions, and imposes on industry a fixed carbon quota which it
reduces over time as a way to combat climate change.
The scheme allocates emissions permits which companies can
buy or sell according to how clean and efficient they are,
creating a carbon price that moves according to demand.
At present companies in the ETS get some permits for free.
The EU is now reviewing the design of the ETS from 2013, and
Poland fears plans to make power generators pay for every tonne
of carbon dioxide (CO2) emissions will create heavy costs for
its highly polluting coal-fired power plants.
The seven states mostly oppose introducing full auctioning
of emissions permits for utilities as of 2013. Poland, which
wants a more gradual move to full auctioning, had said it may
veto the package if its demands are not met.
DON'T WANT TO VETO
"We don't want to block or veto anything really and we hope
we will be able to agree it in the end," said Czech Prime
Minister Mirek Topolanek.
Poland also said it proposed another mechanism that would
make the climate package acceptable for the coal-based economy.
The "specific fuel benchmarking-auctioning" would set free
emission quotas for producing a certain amount of energy that
would equal the emissions by the most clean and technologically
advanced energy producer from a certain source.
Other utilities would only have to buy permits to cover the
difference between this set amount and their real emissions.
Some diplomats say the countries could be offered cash to
upgrade their power plants in exchange for accepting the plan.
French President Nicolas Sarkozy has made clinching the
climate accord in December one of the French EU presidency's top
priorities and many analysts say he may be open to concessions.
Tusk, who also has some reasons to seek a compromise, said
earlier this week he will meet Sarkozy before the December
summit to make sure the agreement is safeguarded.
(Editing by Anthony Barker)
