Belgian steel strike foreshadows battles to come over EU climate policy

By James Kanter

BRUSSELS: In a first for Europe, thousands of steel workers at ArcelorMittal factories in Belgium walked off the job this week to protest European Union policies to combat climate change. The warning strike lasted only one day, but foreshadows the tough battles ahead as the European Commission laid out proposals Wednesday aimed at imposing even tougher standards and further raising the cost of polluting for dirty industries.

The package aims to make the 27-nation bloc the global leader in fighting climate change - if it survives opposition from some politicians, industry and, it seems, some workers, over the coming year. On Monday, steelworkers around the city of Liège halted production, seeking to increase pressure on Belgian and European authorities to make enough pollution permits available to ArcelorMittal to restart a blast furnace.

"You could call this the first carbon dioxide industrial action," said Fabrice Jacquemart, a spokesman for the FGTB union. "There is something utterly absurd about a policy that creates more unemployment in Europe." His warning was mainly aimed at the European Commission, which says its plan is needed to meet the EU's goals of cutting greenhouse gases by one-fifth by 2020 and reducing dependence on imported fossil fuels. It also aims to end the windfall profits that some of Europe's biggest polluters have made from loopholes in the EU's 3-year-old carbon-trading system.

"There is a cost, but the cost is manageable," the commission president José Manuel Barroso said Wednesday, referring to the economic impact of the package. He spoke of losses of 0.5 percent of the bloc's gross domestic product in 2020, or the equivalent of €3, or $4.30, a week for each EU resident. But Barroso said the costs of inaction were far higher because of the damage that would be caused by global warming. He also said that the new measures would promote large-scale innovation and job creation in Europe and give the trade bloc first mover-advantage in new green technologies.

The measures - which still must be approved by the European Parliament and EU governments - also represent a bold gamble that Europe can avoid a trade war with other developed nations like the United States, which has refused to ratify the Kyoto climate treaty.

The bloc has said that it could be forced to take measures to protect some European industries against imports from more competitive factories in less regulated parts of the world if the talks launched last month in Bali, Indonesia, fail to result in a global climate agreement by early next decade. The need to take such defensive measures was left undecided for now. Barroso said the issue would be revisited in 2010, while noting that any measure would have to be compatible with World Trade Organization rules.

"There is no point in Europe being tough if it just means production shifting to countries allowing a free-for-all on emissions," he said. Among the most important of the proposals is to make electrical utilities buy all of the pollution permits they need to offset their output of greenhouse gases starting in 2013. Currently, those permits are allocated by governments, most at no cost.

European electricity companies could face additional costs of up to €30 billion, or $44 billion, annually beginning in 2013, said Colette Lewiner, who monitors energy at Capgemini, a consultancy in Paris. The utilities would seek to pass those extra costs on to their customers, who in turn would face higher prices and be forced to economize on their consumption of fuel and electricity "which is the behavior the commission wants to trigger," Lewiner said.

The overhauled permit system also would be governed centrally by the EU executive in Brussels, rather than partly by member countries, as is done now, with the aim of reducing the ability of companies to profit by lobbying national governments for more pollution permits than they need. Even so, the commission made concessions to other energy-intensive industries, like steel and cement production, to ease opposition from industries and political leaders in countries including France and Germany. For those sectors, which currently receive most of their permits for free, the commission said that it would consider continuing that beyond 2012, depending in part on whether a global agreement was in place by then. Ernest-Antoine Seillière, the president of BusinessEurope, a powerful business lobby, said that those concessions created too much uncertainty for businesses and pledged "to fight against negative economic impacts" in the measures presented Wednesday. Members of the Parliament said they would begin reviewing the proposals within weeks.

To be continue in other article...

(Jakarta, Kamis 21 February 2008, 07.39 pagi)

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