Luxembourg - European Union environment ministers from Eastern and Western states grappled for compromise Wednesday over what to do with billions of euros' worth of greenhouse-gas emissions permits. Eastern members are fighting for the right to sell the permits, awarded to them by the Kyoto Protocol. But Western states say that using the permits would destroy efforts to stop global warming.
EU states should agree that the vast number of surplus permits currently held by governments in Eastern Europe "could undermine the environmental integrity" of a worldwide agreement on fighting climate change after 2012 "if it is not addressed appropriately," the Swedish government, current holder of the EU's rotating presidency, said.
The EU will therefore have to find a way to limit the impact of permit sales "in the light of discussions with other parties," such as Russia and Ukraine, the Swedish proposal said.
Simultaneously Poland, the EU state with the largest number of such permits, urged the bloc to agree minimal limits on their use.
Countries which hold the so-called Assigned Amount Units (AAUs) should be allowed to save them as long as they want and use them to pay any future fines for boosting emissions in whatever quantity they want, the Polish proposal said.
But there should be international limits on the number of AAUs which any one country can buy or sell in a given year, and the money raised should be used for climate-friendly projects, it said.
The Kyoto Protocol on climate change sets a maximum amount of greenhouse gas which each developed country is allowed to emit. The targets are expressed in terms of tons of carbon dioxide (CO2), and each state is given one AAU per ton of CO2 it is allowed to emit.
Countries which emit more CO2 than their Kyoto target have to buy extra AAUs to cover the difference, and countries which keep their emissions below the Kyoto target are allowed to sell their excess AAUs. All targets were calculated according to 1990 emissions.
In 1991 the Soviet Union and its massively polluting industrial base collapsed. That left former-Communist states such as Russia, Ukraine, Poland and the Baltics holding huge AAU reserves.
According to European Union estimates, they currently hold between 7.5 billion and 10 billion AAUs, with an estimated market value of 75-100 billion euros (112-150 billion dollars).
Under Kyoto's rules, governments will still be allowed to sell their AAUs after the protocol expires at the end of 2012.
That prospect has alarmed Western countries, who say that if the former-Communist states are allowed to sell their AAUs after 2012, many governments will simply buy them rather than cutting their own emissions, with potentially disastrous effects on the global fight against climate change.
"Poland and our other Eastern European friends think, very short-sightedly, that they can buy benefits by carrying over unused AAUs (to 2013), but this would destroy (emissions) markets," German nvironment Minister Sigmar Gabriel warned.
The EU's richer Western members therefore want United Nations talks on fighting climate change in Copenhagen in December to put limits on the sale of AAUs once Kyoto expires.
But poorer EU member states such as Poland, Hungary and the Baltics, and major powers such as Russia and Ukraine, all say that it would not be fair to make them sacrifice billions of euros in income.
On Tuesday, EU finance ministers hit deadlock over how to pay for the fight against climate change in a similar row between Eastern and Western member states.
