New German Rule Could Increase Greenhous Gus Emissions

Published: June 29, 2006

By JUDY DEMPSEY

BERLIN, June 28 — Germany, one of the biggest emitters of greenhouse gases in Europe, announced changes Wednesday that would allow increases in its emissions — a move that is expected to be challenged by the European Commission

The German cabinet decided to exclude the coal industry from the European Union's carbon trading program, under which companies must buy permits before they can release higher-than-mandated levels of carbon dioxide into the atmosphere. The move could persuade other countries to loosen their controls, critics said.

Chancellor Angela Merkel, a Conservative, and her Social Democratic coalition partners agreed to cut Germany's emissions limit by nearly 3.4 percent from 2008 to 2012. But critics said the reductions would be ineffectual if coal — a source of some of the worst industrial pollutants — is excluded.

"The cabinet decision will send completely the wrong signal to the other member states," said Claudia Kemfert, an energy professor at the German Institute for Economic Research in Berlin. "For all its support for a clean environment and the Kyoto Protocol, the cabinet decision is very disappointing. The energy lobbies have played a big role in this decision."

The European Commission supports the Kyoto Protocol on climate warming, an international treaty created to curb greenhouse gases. The commission said yesterday that it needed to study Germany's plan before commenting on it.

Sigmar Gabriel, the environment minister and a Social Democrat, defended Germany's decision. "Germany will continue to do justice to its pioneering role in international and European climate protection," he said. He also said the rules set for emissions trading "are significantly more demanding than those in the first emissions trade phase."

The first phase started in 2005 when plants in the oil refining, smelting, steel, cement, ceramics, glass and paper sectors needed special permits to emit carbon dioxide.

The Carbon Trust of Britain, a research and lobbying group supported by the British government, said this week that members of the European Union should cut their grants of carbon emission permits by a minimum of 19 percent from 2008-2012 to prevent the price of the permits from plunging.

The trading system, established to create incentives for companies to curb their emissions of carbon dioxide, involves companies having a permit for each ton of carbon dioxide they emit. They can buy or sell permits if they emit more or less of the gas. But if governments grant too many permits, the price of permits declines, diminishing the incentive to cut emissions.

Climate change will be one topic during the Group of 8 summit meeting of industrial countries next month in St. Petersburg. Germany has tried to steer the agency away from discussing climate change in favor of economic issues, while Britain is trying to put climate change high on an agenda that is expected to be dominated by energy security.

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