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EU Takes the Lead on Implementing Kyoto Climate Treaty

WASHINGTON - World Wildlife Fund today lauded the European Union (EU) for taking the global lead in reducing climate pollution by introducing a sound architecture for emissions trading, or 'cap and trade' as it is also called, in preparation for the implementation of the Kyoto Protocol in Europe.

In the Environment Council meeting yesterday, EU Ministers agreed on the introduction of an EU-wide cap and trade system, a major policy to reduce carbon dioxide and other heat-trapping gas emissions. This system, which covers almost half the EU's CO2 emissions, places an absolute limit on the emissions of the participating and highly polluting industrial and power producing sectors. As long as targets are ambitious and rigorously monitored, the system should provide a guaranteed environmental outcome. Individual companies have their own emissions limits but, provided the overall cap is respected, may buy and sell their "pollution permits" in order to reduce their costs, without affecting the environmental target.

"The EU's decision provides a credible architecture," said Stephan Singer, head of WWF's European Climate Unit in Brussels. "It paves the way for concrete action to meet Kyoto commitments. However, that is not the end of the story. Member States now must agree on ambitious emission reduction targets for all the energy-intensive and power producing industrial sectors."

Important parts of the agreement from WWF's view include:


  • No opt out for industrial participants during the first Kyoto compliance period (2008-2012): mandatory coverage of all European energy-intensive industrial and power sectors from 2008 onwards.
  • Meaningful compliance penalty of 100 EUROs per t/CO2 from 2008 onwards - the penalty rate does not lead to cancellation of emissions reduction obligation.
  • The right of the Commission to survey and eventually 'veto' any biased company emissions reductions targets set by Member State for their domestic industries, thus limiting any environmental shortcoming or economic distortion.
  • A strong monitoring and verification provision for all actors involved.
  • No right for any company or any Member State to use "Hot Air" from Russia in that EU-wide system.