European Lawmakers To Give Free Carbon Credits to Heavy Industry

Satellite Image of European Air Pollution

The EU, that bastion of environmental common sense, is giving away its carbon credits. For free. To some of their biggest polluters.

Reuters reports that European Union lawmakers have approved a list of heavy industries, including metals, textiles, building materials and ceramics, that will be handed free carbon credits starting in 2013, rather than have to pay for them like everyone else. The credits will be handed out under the EU’s Emissions Trading Scheme, or ETS.

The lawmakers acceded to industry complaints that the cost of carbon credits would make them uncompetitive with companies operating in India, China and other nations with fewer environmental safeguards, forcing them to move operations out of the EU. The end result, industry argues, would be the same companies making the same products for the same consumers, only in a more polluting way overseas, a phenomenon known as “carbon leakage.”

Not as Bad as it Sounds

Before the teeth gnashing about the EU’s sell out starts in earnest, let it be known there are some important conditions to the deal, conditions that could prove a basis for what will no doubt be even more onerous cap-and-trade negotiations here in the States.

Only the top 10% most efficient installations in each industry would be given free credits. The rest would have to pay for a percentage of their credits, with that percentage rising over time, from 20% in 2013, to 70% in 2020 and 100% in 2027. From Reuters:

But long before 2027, the risk of carbon leakage is hoped to subside as other regions take on comparable measures to cut carbon emissions in a global climate deal. That deal could emerge as soon as December at a meeting in Copenhagen.

…well, let’s not hold our breath for Copenhagen. But, sooner or later, a climate bill will be dragged to the floor of the US Congress, where it will be pilloried by conservatives, frightened coal-state liberals, and the US Chamber of Commerce as the destroyer of American industry. When that day comes, an American version of the EU’s compromise — phased-in carbon credits, rewards for efficient operations — could be one way to collect votes for cap-n-trade in the US-of-A.

BC (Ben) Upham is a freelance writer based in Los Angeles. He has written for the New York Times, and was a writer and editor for News Communications, Inc., a local paper consortium serving Manhattan. When he's not blogging on green issues -- and especially renewable energy -- he's hiking in the Angeles Mountains or hanging out at El Matador.

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