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Poland lobbies neighbours on AAUs, backloading opposition

09 Oct 2012 17:49:07 | edcm

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A coalition of central and eastern European member states wants surplus UN carbon allowances - which environmentalists say must be cancelled if the new Kyoto Protocol is to be effective - to be allowable for use next year and beyond, according to Poland.

Ireland, the incoming holder of the rotating EU presidency, has indicated that it is sympathetic to the views of countries with large assigned amount unit (AAU) surpluses that want to carry them to the next Kyoto commitment period, which should begin next year.

"Notwithstanding the potential impact of surplus units on the environmental integrity of future commitments, any international agreement in this context will need to be mindful of the concerns of those parties who will be part of the second commitment period that have the potential to carry forward large surpluses of units," a spokesman for the Irish environment minister said.

On Monday, the Polish environment minister hosted informal talks involving contemporaries from the Czech Republic and Slovakia, as well as representatives from Hungary, Bulgaria and Romania.

The group hold "very similar" views on AAUs, a spokeswoman for the ministry said.

"AAUs constitute [member states'] asset and reward for overachievement and Council conclusions should respect that," the spokeswoman said.

"Poland has reduced its carbon dioxide emission by 30% since the beginning of the nineties, mainly due to a reform of outdated industry and investments in environmental protection. The Kyoto Protocol allows us to trade the surplus of allowed emissions units," she said.

Poland raised €40m last week by selling surplus AAUs to Spain (see EDCM 4 October 2012).

The EU has not yet been able to adopt a common position for the purposes of international negotiations on whether AAUs should be cancelled or carried over. Most member states agree that full carry-over, which is vehemently opposed by the world's most climate change-vulnerable countries, would damage the environmental integrity of the Kyoto Protocol (see EDCM 5 September 2012).

The bloc is set to discuss the matter again later this month. The current holder of the EU presidency, Cyprus, has hinted that the promise of some AAU carry-over could be used as a bargaining tool to get Poland to sign up emissions reduction targets for beyond 2020 (see EDCM 6 August 2012).

Analysts and environmental groups have warned if no restrictions are placed on the carry-over of AAU surpluses, the emissions reduction pledges of developed countries would not lead to any actual emissions reductions.

Backloading

Separately, the Polish spokeswoman reiterated the country's total opposition to the Commission's proposal to delay carbon allowance auctions to boost prices in the EU's beleaguered emissions trading system (ETS).

But the group meeting on Monday did not adopt a common position on the issue.

According to Poland, the group wants to see "in-depth impact assessment at country level" before they could properly discuss the proposal.

"Poland is against the backloading proposal because it is against the principle of a market system. The ETS is defined as a market-based system, with the European Commission as a referee or regulator, and a regulator should not be in a position to change the rules when it pleases, especially during the game.

"It completely ruins legal certainty for investors. It also sets a precedent - once the Commission meddles in the market. There is nothing to stop it from happening again, this time however without involvement of member states. The Commission would get a mandate to intervene whenever they think they can. It is so open. That is unsafe," the spokeswoman said. VF

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