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Creative accounting will help E.U. meet Kyoto targets

The European Union projects that it will meet emission targets set by the Kyoto Protocol -- but only with accounting help from carbon offsets and emissions trading, the European Environment Agency reported today.

Current greenhouse gas emissions from Western Europe still exceed their U.N. commitments, the report says, and 10 countries will have to rely on emissions trading, land-use changes or carbon offsets to meet their legally binding levels. In general, Mediterranean countries like Spain and Italy have been most delinquent about meeting their targets, the agency said.

Of the wealthy, older E.U. members, only France, Germany, Greece, Sweden and the United Kingdom are currently below their Kyoto agreements, the report says.

Despite the fine print, European leaders greeted the agency's projections with fanfare. The emissions projections should be a sign to the rest of the world, said Andreas Carlgren, the environment minister of Sweden, which holds the bloc's rotating presidency.

"E.U. emissions reductions far exceed our commitments," Carlgren said in a statement. "This is taking place without the full impact of the economic crisis yet being evident in the figures. This shows that considered policies and concrete measures are effective in the fight against climate change."

A close reading of the report reveals that European ambitions have only begun to catch up with the bloc's commitments, with many of the greenhouse reductions achieved by countries partially derived from secondary benefits, like the gasification of the energy industry in Britain or the economic collapse of the former East Germany.

The 15 Western European nations that accepted a joint target as part of the last U.N. climate deal -- which covers 2008 to 2012 -- committed to cutting emissions on average 8 percent below Kyoto's baseline, typically set at 1990 levels. Even with the help of the recession, emissions for the region sat at 6.2 percent below this baseline in 2008, and the most recent five-year average was 3.9 percent.

The gap is especially pronounced because of the inability of several southern countries to meet the reductions promised as part of the bloc's burden-sharing agreement, which divvied up the bloc's emission commitment in the late 1990s.

"This [emissions] average would have been substantially lower without the large absolute gaps observed between actual domestic emission levels and burden-sharing targets in Italy and Spain," the report says.

These countries will be joined by Austria, Belgium, Denmark, Finland, Ireland, Luxembourg, the Netherlands and Portugal in using Kyoto accounting mechanisms to close their emissions gap.

Some additional emission credits -- enough to increase the E.U. average by 1.4 percentage points -- will come from financing clean energy projects in the developing world. Improved forest management and other land-use changes will account for an additional percentage point, the report estimated.

Another 2.2 percent will come from excess emission credits purchased from other Kyoto members. Already, a host of European countries have purchased these credits from flush post-communist nations, largely through what are called green investment schemes, which seek to mollify criticisms that the emission credits amount to "hot air" (Greenwire, Nov. 9).

By using these accounting schemes, only Austria will be projected to be above its Kyoto commitments. Excess Kyoto credits from Germany, France and Britain will be essential for the region meeting its overall target, the report adds.

Since 2004 -- prior to the beginning of the European Union's cap-and-trade system -- energy demand from households in Western Europe has been reduced, evidence that the bloc's policies have had some success in curbing emissions.

The agency's report, it notes, does not wholly account for the emissions decline that will be caused by the current recession, which could result in fewer Kyoto mechanisms being used.

The newer members of the European Union, such as Poland and Slovakia, joined the bloc after the Kyoto Protocol and fall under individual commitments. Because of the economic collapse of post-communist states during the 1990s, the region has seen its emissions fall 25.4 percent since 1990, and all but Slovenia are on track to easily meet their caps.

The European Union, the world's largest economy, accounts for some 12.4 percent of global greenhouse gas emissions, the report notes -- less than the United States or China.

Click here to read the EEA report.

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