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Sunday, August 10, 2008

Economy in June, 2008

In this edition:
  1. Commission U-turn on fuel aid to fishermen
  2. Global competition and European companies’ location decisions
  3. EU heads towards 'carbon leakage' clash
  4. Report shows EU emissions falling slightly in 2006
  5. Deal clinched on capping aircraft emissions
  6. Aviation included in EU CO2 trading scheme

Commission U-turn on fuel aid to fishermen

18 June 2008

The European Commission yesterday (17 June) outlined a series of measures "to tackle the immediate social and economic hardship" of rising fuel costs on fishermen, just weeks after it refused to make any short-term concessions to the EU's ailing fishing industry.

The measures include the possibility for governments to raise the aid cap to €100,000 for every vessel over a three-year period, up from the current €30,000. The aid would however still be capped at €100,000 for every fishing firm.

The move came as fisheries ministers from seven EU countries, meeting in Venice on Tuesday, called for an increase in aid for their beleaguered fishing industry.

"According to data from the European Commission, the price of diesel bought by EU fishermen has increased 240% since 2004," said ministers from Italy, France, Greece, Malta, Portugal and Spain in a statement.

"We have a serious crisis in the fisheries sector because of high fuel costs, so we need quick measures to save this sector," said Italian Agriculture Minister Luca Zaia after the meeting, Reuters reported.

The Commission's move appears to be a U-turn compared with its previous policy stance. Earlier this month, the EU executive warned against starting a "vicious circle" whereby if lower taxes are approved for fishermen, "road haulers, taxi drivers and so on will seek the same special treatment" (EurActiv 02/06/08).

Joe Borg, the EU fisheries commissioner, will present the draft measures in detail at a meeting of agricultural ministers on 24 June. Other elements will include:

  • emergency aid for temporary cessation of activities;
  • decommissioning aid for fleets that accept substantial restructuring;
  • aid to encourage a switch towards more energy-efficient and environmentally-friendly fishing methods, and;
  • market measures to increase the value of fish.
source
My comment: I also think this is a vicious circle since the price of the fuel won't decrease and that it also stimulates people to count on aid instead of think how to switch to more economy fishing. I preferred those money to go to the same people, just as a subsidy for changing the boats, engines or whatever to a greener one (greener in the sense of more economical).

Global competition and European companies’ location decisions

23 June 2008
European Foundation for the Improvement of Living and Working Conditions

Only 8% of job losses announced in Europe between 2003 and 2006 were due to the relocation of work to other countries, a new study by the EU agency Eurofound reveals.

Contrary to public perception, most jobs have not been relocated offshore but simply destroyed, as was the case for heavy industry in large parts of Europe in the 1970s and 1980s, the study says.

These results take the wind out of the sails of critics of globalisation, who blame companies for offshoring jobs to Eastern Europe or East Asia where labour is cheaper.

In total, less than 200,000 jobs have been relocated or offshored within the EU or to a non-European country over the four-year period concerned, while there was no indication of a future increase, the study says. Research showed that off-shoring is increasingly becoming a more significant phenomenon in the new Eastern member states.

However, the proportion of recorded job losses attributable to offshoring varies widely across the EU. In Portugal and Ireland, offshoring accounts for around 25% of job losses, while in the Netherlands and Belgium figures were as low as 5%, according to Eurofound.

The study also shows that offshoring takes place to a much higher degree in the service and high-tech sectors, with banking and insurance accounting for the highest proportion of EU jobs lost through delocalisation (25%). Figures in this sector were the highest in the UK. 60% of job losses in these sectors were due to relocation, mostly to Asia.

Relatively few of the job losses related to offshoring happened to be in more basic manufacturing industries, such as textiles and clothing. These jobs were largely moved to the new Eastern member states. source

My comment: This article is to prepare us for the carbon leakage, a fictional enemy the EU seems to fight for a while. Well, people said offshoring and relocations is negligible. And theyare the experts.

EU heads towards 'carbon leakage' clash

18 June 2008

France and Germany are calling on Brussels to identify which sectors could benefit from special protection measures against foreign competition under a tightened EU carbon market before wrapping up global climate talks. But the Commission and a key MEP are insisting on waiting.

The French government, which is set to take over the EU's six month rotating presidency on 1 July, says the EU should decide now in favour of imposing special import duties on products made in third countries with lax climate change regimes. Such duties, to take effect after 2013, would send a reassuring signal to Europe's heavy industries, such as cement and steelmakers, who are likely to face tougher emissions restrictions as the EU tightens its carbon 'belt'.

Berlin, meanwhile, says it is "urgent" for select industries to be guaranteed free emissions rights after 2013 in order to prevent them from fleeing the continent in search of countries where emitting CO2 is cheaper or free.

The Commission has already given assurances to concerned industries that special measures would be adopted in case ongoing international climate talks fail to produce a successor to the Kyoto Protocol, which expires at the end of 2012 (EurActiv 28/02/08).

In addition to diverging views on the carbon leakage issue, a debate is also heating up over the extent to which EU companies should be allowed to finance 'clean' development projects in third countries in exchange for emissions reduction credits within the EU.

The so-called Clean Development Mechanism (CDM), introduced in the 1998 Kyoto Protocol, is designed to transfer money and technology from developed states struggling to reduce greenhouse gas emissions towards developing states that want to industrialise but lack money for modern low-emissions technologies.

But the CDM has been heavily criticised recently amid concerns that many of the projects being financed are not producing additional emissions reductions since they would have been built anyway.

Doyle wants to expand but tighten the CDM system. "Almost half" the CO2 abatement effort between 2013 and 2020 could be achieved through CDM, says her report, but only in cooperation with countries that have signed up to an international climate deal. In addition, only 'gold standard' projects that have passed a UN quality control assessment should be eligible, her report says.

The MEP wants a "substantial" amount (up to half) of revenues obtained through EU ETS auctioning to be placed into a special fund to help developing states combat deforestation, adapt to climate change or buy clean technologies. In addition, 60 million emissions allowances normally given to new entrants to the EU ETS should be offered as an incentive to the first 12 fossil fuel fired power facilities - either within or outside the EU's borders - to "have begun to commercially capture and geologically store carbon dioxide emissions".source

My comment: Few remarks. First of all, I can't seem to find a CCS technology on the net that is working. I know there are some functioning such plants in Norway, but I'm fairly unsure of their effectiveness. Then, I can't stop myself from asking, what the hell is getting into the EC heads with that CCS. I mean, it's not even functional yet, why do they believe it will solve all their problems. Instead, I think we have to go for energy efficiency. It's much much smarter and will work in all the cases and will stimulate scientists and engeneers to come up with even better ways to prevent emmissions of heat from out homes and appliences. /because heat generally is another name for wasted energy in electricity-it doesn't do work, it just dissipates/

Also, I'd like to point out, AGAIN, that carbon leakage is an absolute nonsense, especially if we do impose import taxes on stuff produced in not-green countries. Yep, the WTO will go crazy, but what the hell, it will be fun and worthy! But to exclude some industries from the emissions count is simply and outrageously WRONG!

Report shows EU emissions falling slightly in 2006

23 June 2008

EU member states have made progress in cutting their greenhouse gas emissions to be on course to meet their Kyoto targets, according to data released for 2006. But the Commission is particularly concerned about emissions rises in the new member states.

The reportexternal , released by the European Environment Agency (EEA) on 18 June, shows emissions from the EU 27 fell by 0.3% from 2005 levels, and 7.7% from the base level of 1990. Total emissions amounted to over 5.1 billion tonnes of CO2 emitted in 2006, compared to almost 5.6 billion tonnes in 1990.

The main reasons, according to the Commission, for the reduction of greenhouse gases in the EU were warmer weather, lower production of nitric acid (which causes the greenhouse gas nitrous oxide), decreases in emissions from chemicals production in France and Hungary and lower use of gas and liquid fluids by households.

The EU 15 made the most progress in cutting emissions, an 0.8% reduction from 2005 levels.

Additionally, the EU 15 further reduced its emissions in the waste and agriculture sectors, whilst the manufacturing sector showed a slight decline and the energy sector has stabilised its emissions in the last few years.

The Commission was pleased the EU 15 was able to record a 2.8% increase in GDP in 2005-2006 while reducing emissions, saying it achieved its objective of decoupling economic growth and emissions reduction.

Conversely, the twelve new member states came in for particular criticism by the Commission, who politely called their emissions increases "not helpful". Dimas said the new member states "have to bear in mind that they cannot rely on the successes of the past," alluding to the sharp decreases in emissions in Eastern Europe in the 1990s, which were a result of the collapse of Communism and related industries.

The road transport sector, however, has been of particular concern to the Commission, with emissions rising continuously, releasing 6.5 million tonnes of CO2 or some 0.7% more than 2005. The EEA puts this down to the increased use of diesel for freight and passenger transport. Emissions as a result of industrial processes were slightly up.

Two sectors currently not covered by the Kyoto Protocol, the aviation and international shipping industries, had large increases of five and 10 million tonnes of CO2 respectively.source

My comment: Two things impressed me-first, no one said how much is the annual production of emissions in the aviation and shipping, just the increase, which troubles me significantly. And second, I don't like how we have EU15 and EU12. Because EU12 is struggling to get on their feet and instead of reprimanding us, EU 15 have to offer help. Well, not to Poland obviously, but still, new members have to be guided to cleaner production and strictly punished when a production is not following European regulations. I mean that! Because otherwise, nothing will change and that's bad!

Deal clinched on capping aircraft emissions

27 June 2008

MEPs and national governments, represented by the EU's current Slovenian Presidency, reached a landmark deal yesterday (26 June) on the details of plans to include aviation in the EU's Emissions Trading Scheme as of 2012.

The deal still needs to be formally approved but, according to reports, it would require all flights, both within the EU as well as international ones arriving or leaving the bloc, to participate in the Union's carbon cap-and-trade scheme as of 2012.

The two-staged approach initially proposed by the Commission in a bid to appease third countries that are reluctant to be forced into such a scheme – the US in particular – has therefore been rejected.

85% of the permits would still be handed out to operators for free, but the remaining 15% would have to be auctioned. Airlines wanting to emit more CO2 than the number of allowances they hold will have to buy extra permits from other companies, encouraging them to invest in greener technologies.

Revenues from auctioning would not be earmarked for research on improving efficiency in the aviation sector or for investment into 'green' modes of transport, as demanded by MEPs, due to national governments' strong resistance to such plans. But the compromise would ask member states to report on how they spend the money.

The deal, which sources say is likely to be approved after difficult political negotiations, was immediately slammed by both airlines and green groups. source

Aviation included in EU CO2 trading scheme

9 July 2008

The European Parliament voted in favour of including aviation emissions in the EU's emission trading scheme (EU ETS) as of 2012 in a plenary vote on 8 July. The move was immediately criticised by the aviation industry as well as the United States.

Background:

The deal, based on an agreement between the Council and Parliament on 26 June (EurActiv 27/06/08), would require all flights, both within the EU as well as international ones arriving or leaving the bloc, to participate in the Union's carbon cap-and-trade scheme from 2012.

Other main points included in the deal are:

  • Emissions reduction targets will be based on average annual emissions between 2004-06 and will be cut by 3% in 2012, and then by 5% from 2013 onwards (this could be subject to change as part of a general review of the ETS in the future).
  • 85% of emissions allowances will be allocated to airlines for free with 15% to be auctioned off.
  • EU to look for an international agreement on curbing aviation emissions, including a bilateral agreement with the US.
  • Airline operators who persistently fail to comply with the scheme could be banned from the EU if a member state asks for this.
  • Exemptions from the aviation ETS will cover:
    • light aeroplanes under 5.7 tonnes
    • humanitarian and UN mandated planes
    • firefighting and emergency planes
    • police, customs and military planes
    • planes on research missions
    • small airline companies with low emissions

The use of the revenues received from the auctioning process will be determined by the member states, although the deal says they should go towards funding R&D on 'clean aircraft', anti-deforestation measures in the developing world and general climate change alleviation projects.

Flights carrying government officials and royalty have been included in the scheme.

The costs of placing the aviation industry in the ETS will be beared by the customer, meaning air ticket hikes of €5 to €40 by 2020 depending on the length of the flight, according to an impact assessment report from the Commission. source

My comment: Now, first, I didn't quite understand what does it mean "EU to look for an international agreement on curbing aviation emissions, including a bilateral agreement with the US". The EU should impose those limitations on all planes, no matter of the eventual agreement with US. Just as we cannot go and polute their soil, they cannot do it to ours. Anyway, I'm glad vote passed, because this is the way it should be. I just prefer to have 50% emission permits for free. This way, there will be a real permit market, not an ilusion of such. And I also think the money generated by the permits should go to green technologies and not just generally in member states hands.

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