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A Financial Dispute Threatens An EU Agreement On New Climate Laws

A Financial Dispute Threatens An EU Agreement On New Climate Laws
A disagreement over how to protect poorer residents from European Union proposals to put a price on pollution is threatening to derail the bloc's agreement on a slew of new green initiatives.
Environment ministers from the EU's 27 nations will gather on Tuesday to try to reach an agreement on more ambitious laws to cut global warming emissions, such as revisions to the EU carbon market and a phase-out of new fossil-fuel-powered automobiles by 2035.
"Nobody's going to leave the room without a bit of pain," EU climate policy chief Frans Timmermans said, adding that he was hopeful the ministers would reach a deal.
The laws are intended to work together to meet the EU's 2030 aim of reducing net emissions by 55% from 1990 levels. What ministers agree on will determine their negotiating posture with the EU Parliament on final laws.
Countries disagree on Brussels' plan to establish a new EU carbon market in 2026, imposing CO2 charges on polluting fuels used in buildings and transportation.
The idea attempts to reduce rising transportation emissions, but it has met with opposition from several countries concerned that it will hike energy expenses, which have risen in recent months.
Any agreement is set to rest on ministers agreeing on a new EU fund to assist poorer households in paying bills and switching to sustainable energy, according to diplomats.
Countries disagree on the size of the fund. The Commission recommended that it include money from a quarter of the CO2 permits sold in the new carbon market, which is estimated to generate around 72 billion euros ($76 billion) between 2025 and 2032.
Wealthier EU member states, including Germany, want to limit its size, with some, such as Austria, receiving less than 1% of the proposed fund. Some nations in the centre and east argue that it should be larger, and that they cannot ratify the new carbon market without it.
Because the laws are interconnected, failure to reach an agreement on this topic could jeopardise negotiations on other ideas.
"We are preparing for a long day or even a short night," German environment minister Steffi Lemke said on Tuesday morning.
Poland's climate minister said on Tuesday that the government could not accept a new carbon market or an EU plan to effectively restrict new combustion engine car sales beginning in 2035 in order to accelerate Europe's transition to electric vehicles.
Last week, Germany's finance minister sparked debate on that idea by declaring that the EU's largest car market would not support the target. According to a document seen by Reuters, Italy, Portugal, Slovakia, Bulgaria, and Romania all want it postponed until 2040. 
New automobiles have an average lifespan of 15 years, and Brussels has warned that a later ban would prevent the EU from reaching net zero emissions by 2050, a worldwide milestone that scientists think will avert catastrophic climate change.
"The decision on cars will show how serious European governments are about their climate promises," said Julia Poliscanova from campaign group Transport and Environment.

Christopher J. Mitchell

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