From the Newswire: 'One of the central, but not well known, direct goals of the Irish EU Presidency is to reach agreement with the European Parliament about the CO2 Emissions Trading Market. This market is to be launched in 2005. Ministers of the EU member states are demanding a market full of loopholes, so that companies can escape reducing CO2 and other greenhouse gases on EU territory. Instead companies will be able to produce and trade the commodity “the right to pollute” by financing cheap efficiency projects in Eastern Europe and in the South.

An agreement between the EU Member States and the European Parliament should finally be reached at the end of June, but ideally should come about before the last legislative session of the European Parliament in April, before the elections. Ireland already held a conference in Dublin on February 3 to discuss the various National Allocations Plans among the Member States. These allocation plans are the foundation of privatising the right to pollute among companies in the EU, concerning high-polluting industries such as the steel and paper industries. Before the end of March, all Member States should have finished their allocation plans.

The most crucial topic will be on the loopholes that will be provided to companies. Last year, the European Commission proposed to link the European Market with other “flexible mechanisms” for reaching reduction targets, such as the CDM and JI mechanisms, that make it possible for Member States and companies to create the right to pollute with CO₂ in the EU, by developing or financing “climate projects” in other countries. The Commission however proposed to put a cap of 8 per cent on this. The EU Parliament agreed on this. In December, a majority of the EU-member states expressed the opinion that they want to get rid of this cap. Now, Member States and the EU Parliament have to come to an agreement so that the trading scheme can be implemented in January 2005.

This so-called “linking directive” will boost the European Market with cheap credits, so reaching the Kyoto-targets will be much cheaper for companies. States such as Spain (which is very energy inefficient), as well as most industries, are heavily engaged in lobbying the EU Parliament and other Member States to link the European market with these other flexible mechanisms. The consequences are that no reductions will have to be met in Europe itself, enabling industry and Member States to continue polluting anyway and further postponing solutions to climate change. Another consequence is that a very lucrative market will be created, by creating a new commodity and very flexible market rules.'

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