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U.S. Climate Plan Threatens EU Goal for Global Accord

May 22, 2009





The European Union may have to scale back its goals to reduce global-warming emissions after a less- ambitious plan won initial approval in U.S. Congress.

The 27-nation bloc has asked all industrialized countries to reduce greenhouse gases an average 30 percent over 30 years. The first U.S. legislation ever to cap emissions, which passed a committee vote yesterday, calls for a 5 percent cut by American industry in the period. The gap poses a potential conflict when global talks on a new climate treaty resume June 1 in Bonn.

Lower targets ease costs for coal-burning utilities such as RWE AG of Germany and Ohio-based American Electric Power Co. At the same time, United Nations scientists have said gas output should peak by 2015 or temperatures may rise more than 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, adding to the risk of droughts and flooding from climate change.

“The U.S. bill is clearly an advance on the past,” said James Cameron, vice chairman of the London-based fund manager Climate Change Capital and a former treaty negotiator. Still, “the middle ground of scientific opinion tells us we need to make reductions in a much larger amount over a shorter period.”

The UN-led talks are scheduled to produce a climate- protection agreement by year-end in Copenhagen.

The U.S. is not likely to accept “more aggressive” reduction targets for itself in a treaty that Congress is now considering for domestic regulations, said Ben Feldman, environmental markets executive director at JPMorgan Chase & Co. in New York. The U.S. goals “are unlikely to be sufficient for the EU to move to 30 percent” reductions, Feldman said.




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