The hot air of hypocrisy
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22/03/2008
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Economist (London)
Demand agreement on a divorce settlement before you marry, and the world may believe many things of you: that you are prudent, or cynical, or just a bit mean. What it will not believe is that you are a swooning romantic, moved only by the high ideals of love. You can boast you are an idealist, in other words, or you can make a pre-nuptial agreement: you cannot plausibly do both.
Just such a test faced European Union leaders at their recent summit, when they reviewed their year-old plan to lead the world in the fight against climate change. A year ago they were brimming with selfless idealism. They agreed to make deep cuts in carbon emissions (by a fifth from 1990 levels by 2020), even if other rich countries did not follow. The signal was clear: Europe will start saving the planet now, even if the selfish Americans (not to mention the Chinese and Indians) are not ready. Bigger cuts were promised if other countries joined in, prompting much self-congratulatory talk about the eu's "leading role".
That was then. A year on, with the world economy looking wobblier, the March summit was a less uplifting affair. Leaders from countries with powerful heavy-industry lobbies called for explicit measures to "protect" European firms in case talks on a global climate-change deal failed (and left the Europeans pushing ahead with tough curbs on their own). In a move that would make an American divorce lawyer proud, Germany, France, Austria, Italy and the Czech Republic all asked the eu to plan for failure, insisting that defensive measures must be agreed before climate-change talks in Copenhagen at the end of 2009.
Demanding "certainty" today for businesses that have to make long-term investment decisions, the heads of governments also asked for a list of energy-intensive industries "particularly exposed to international competition". Industries making steel, aluminium, paper, chemicals and bricks were all cited, as were others such as cement that are barely touched by imports (being cheap and heavy, cement is usually produced round the corner from where it is used).
eu leaders then asked for a range of protective policies to be spelled out. Germany backed a carve-out for the most energy-guzzling factories, giving them continued access to free carbon credits from the eu's emissions trading scheme (ets) after 2012, by which time other polluters will mostly be buying emissions allowances at auction. The worst idea came from France's president, Nicolas Sarkozy, who renewed calls for a carbon tax on imports from countries that "don't play the game" on climate change. The European Commission should find a way to "penalise" companies from such countries, he added-blithely ignoring the existence of firms that come from more than one country, source components from a dozen more and manufacture on every continent. Otherwise, he said, Europe would "get all the downsides [of fighting climate change], and none of the benefits". Other than the benefit of saving the planet, one might retort: the project in which Europe claims a "leading" role.
Others were more subtle than Mr Sarkozy, but even more hypocritical, dressing up calls for handouts as concern for the world. Endless bigwigs said heavy industry would move to countries with "lower standards" unless helped to stay (by letting factories observe, er, lower standards). This argument even has its own jargon: "carbon leakage", an ugly term gaining currency in Euro-circles, to convey the threat that carbon-spewing firms might move to places with weaker environmental laws.
Advocates of special favours for eu industry insist that factory owners will still have an incentive to install clean technology, because "free" ets allowances will not really be free. They may be accompanied by benchmarks