Ecology, Energy, EU – Baltic States, Industry, Legislation

CBI’s director-general, Richard Lambert, provided several arguments against hardening the targets, including the main one, i.e. that “a unilateral tightening would create an uneven playing field and that businesses affected by the recession could not cope with additional costs”.

Mr Huhne, the British energy minister surprised some members of the British coalition government, as well as business, when two weeks ago he joined forces with his French and German counterparts, Jean-Louis Borloo and Norbert Rottgen, to call for the higher targets in the European Union.

Financial Times’ environment correspondent, Fiona Harvey, cited Mr. Lambert’s arguments in the paper’s recent publication (July 28, 2010): “Europe must not overburden its companies with unilateral climate protection constraints . . . Our companies are in global competition and are able to locate production globally.”  

The move against the tough emissions came as the British trade unions and the Energy Intensive Users Group, representing companies with high energy needs, revealed information that the energy prices could more than double by 2020 under the government’s climate policies, a surge that “would jeopardise the future competitiveness” of industries employing 225,000 people.

Union’s intentions vs. industry

The controversies started this spring, when the EU leaders pronounced plans to endorse a far more ambitious 30 per cent emission reduction instead of the previously agreed 20 per cent reduction by 2020.

Controversies still abound as to whether the EU should stick to its initial goal of cutting emissions by 20 per cent by 2020.

The European Commission estimated in May 2010 that the cost of meeting the 20 per cent target had dropped from € 70bn to € 48bn per year since 2008. Moving to a 30 per cent target would cost an extra € 33bn per year by 2020.

These costs, the British industrialists argue, are “still huge on top of the considerable burden caused by the recession”, said CBI’s director-general, Richard Lambert.

However, not all are unanimous about the lax measures: there are many of the CBI’s members that are unhappy with the organisation’s position, and want to move to the tougher target as quickly as possible. Thus in the middle of July, a group of 27 high-profile business leaders in Britain wrote to the FT supporting the higher target. They addressed the three ministers – in the UK, France and Germany, as well as their business federations to stop wrangling between businesses and politicians over the extent of emissions cuts and finally decide what is economically affordable and politically feasible.

The British FT correspondent mentioned that some companies were concerned that moving to the higher target unilaterally would give competitors in countries without stringent climate regulations an unfair competitive advantage. This, they say, would not mean an overall reduction in greenhouse gases, but their displacement to lower cost developing countries. That means, for example, that environmental taxes and costs incurred in emission reduction would reduce competitiveness of British industry; politicians have to keep this argument in their minds.   

This is what the Confederation of British Industries, CBI warned about: the tough rules would entail “huge costs”, “huge repercussions” and would “jeopardise and potentially damage” businesses and economy.