updated 1/23/2008 8:19:54 AM ET 2008-01-23T13:19:54

EU Commission President Jose Manuel Barroso says a new package of measures to fight global warming would cost just the equivalent of 3 euros ($4.35) per week per EU citizen.

The European Union plans to slash greenhouse gases by a fifth by 2020, imposing costs on major polluters and rapidly scaling up how much energy it draws from windmills, solar panels and energy crops.

Barroso told the European Parliament that the bloc's 27 nations are ready to make further carbon dioxide cuts if trade partners will join a global pact to cut emissions and limit global temperature increases.

"This package meets the challenges of the future. We think it's good for the planet, it's good for the European economy and it's good for its citizens," he said.

He described the cost as "manageable," he told the EU lawmakers who must vote to back the project. He added: "The additional effort needed ... would be to less than 0.5 percent of gross domestic product by 2020. This amounts to about 3 euros a week for everyone."

Inaction costs more, Barroso says
The price of not doing anything would be more than 10 times that, he said.

"And every day the price of oil and gas goes up, the real cost of the package falls," he said. "Instead of costs, we really should be talking about gains for the EU."

The EU executive will set caps for how much greenhouse gas each EU nation can release to hit the target of cutting levels by 20 percent below 1990 levels in 2020 — or 14 percent below 2005.

Richer EU nations will have to go further, while some poorer countries, such as EU newcomer Romania, will be allowed to increase emissions as their economies expand. No country will have to cut emissions by more than a fifth.

Europe also plans to draw a fifth of its overall energy from renewable power by 2020. That means many European countries will have to ramp up their wind, solar and hydroelectric power by 2020 to hit new binding targets.

Balancing act
However, the centerpiece of the program  a carbon cap-and-trade program for heavy industry — will carry a much more expensive price tag as it will likely hike electricity bills and may cause the cost of manufacturing in Europe to soar above other regions.

The EU insists that will be balanced by a 50 billion euros ($72 billion) reduction in the EU's bill for oil and natural gas imports, while a low-carbon revolution within Europe generates "first mover advantage" for a wave of energy-efficient goods and renewable power technology for export.

Environmentalists claim that the EU plan — while the first of its kind to reduce CO2 emissions — won't go far enough to limit rising world temperatures.

At the same time, industries worry that the price of going green will cost production and jobs. EU employers claimed last week that higher energy costs and paying more to pollute could make them less competitive. EU trade unions said they were worried by the risk of major job losses if companies move abroad, saying 50,000 jobs in the steel sector were at risk.

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