Nov. 30, 2008
Having just come to terms with the European Commission's (EC) demand that Poland reduce emissions in its 2008-12 national allocation plan by 27 percent, the country is now volubly criticizing the post-2012 configuration of the EU's Emission Trading Scheme (ETS). Warsaw is also trying to persuade other member states to form a wider front against what 'eurocrats' are calling the cornerstone of the EU's climate change policy.
While the EC's climate change plan remains largely in blueprint form, its chief stipulation is that all ETS-covered installations will have to bid via auction for CO2 emission permits. This introduces a fundamental change from the current system in which emission quotas are given to installations free of charge, with extra costs involved only for overshooting quotas.
Poland's energy sector has long opposed the EC's reduced allowances. It has also fought, with some success, for more favourable allocation of reduced allowances, arguing that too tight a cap will result in rising energy prices, which in turn will put the brakes on the entire economy.
It comes, then, as no surprise that Polish industry, led by the energy sector, is balking at the obligation to pay not a fraction, but the entirety of its allowances. Any Brussels-based decision resulting in exponentially higher costs will likely meet with strong opposition.
In sounding the alarm of an economic slowdown, industry has some figures to support its case that are indeed worrying. According to various reports from industrial circles, the EU's climate policy will cost Poland an estimated EUR 600 million annually through 2010, and between EUR 2.4 billion and EUR 4.2 billion annually after 2020.
One of Poland's industrial bodies, the Polish Electricity Association, has called for the government to prepare a legislative action plan to soften the blows from the EC's climate change package. Also, high-level rumours that Warsaw would work to assemble a coalition of states to have the plan watered down turned out to be true. Such a coalition emerged during the July 2008 meeting of EU environment ministers in Paris, at which Poland and seven other CEE countries articulated their concerns about the EC's plan.
"Poland would like the auctioning to concern 20 percent of allowances in 2013, a share that would grow by 10 percent annually after that," said Poland's Environment Minister Maciej Nowicki, who later argued that the plan, if implemented, would cause a 70-percent increase in energy prices. Similar claims came from other CEE ministers.
An even stronger message came from Warsaw in early August, when Michal Boni, the top aide of Prime Minister Donald Tusk's strategy team, told the Polish Press Agency that "Poland [is] working to create a blocking minority so as to block EU plans about post-2012 emission allowances [i.e. full auctioning]."
The EU arithmetic, however, is such that Poland requires the support of all new member states. Given the unlikelihood of such a united stand against the EC, Poland would very probably turn to one or more of the bigger EU15 states for support.
The degree of effectiveness of Polish lobbying can only be speculated as of print deadline, but the European Parliament began proceedings in late August on the legal means of ETS implementation.
