(photo: Reuters)

Government representatives of the seven countries are protesting the EC’s “top-down” approach in establishing new (i.e. lower) carbon caps for a number of member states. Hungary, for example, saw its 2008–12 CO2 annual emissions cap decreased from 30.7 million tonnes to 26.9 million—12.4 percent lower than the country’s proposal. EC spokeswoman Barbara Helfferich, according to ENDS Europe, claimed that the EU calculated carbon caps uniformly across all member states, adding that EU executives are “confident” that their actions will stand up in court.

Industry widely views the cuts as a direct blow against compatibility on the European market. And while it remains too early to determine the consequences of the cuts for Hungary’s energy sector—as the Hungarian government has yet to take a decision on how to allocate reductions—Jozsef Vlaska, CEO of Hungary’s Matra Power Plant, told Green Horizon that the cuts could likely result in higher electricity producer prices. Many environmental groups, however, strongly back EU efforts to pressure national governments to uphold their environmental commitments. Peter Kardos, climate change manager at the Budapest-based Energia Club, said that he believes the EC calculations are to be trusted more than those carried out by the Hungarian government. “We believe a strong industrial lobby has influenced the decisions of the government,” said Kardos.

On the other hand, Hungary’s senior environmental negotiator Tibor Farago is convinced that the CEE countries disputing the EC calculations have correctly determined their quotas.

“We have proved in the past that we support a stronger EU,” said Farago. “But the new member states want to catch up with EU-15 in all aspects—and that is the real meaning of cohesion.” Meanwhile, the surprising aspect about Riga’s decision to challenge the cuts is that it was taken in spite of a decision announced by the EC in July to increase the 2008–12allocations for five member states—including Latvia. Stephen Stec, a senior legal expert at the REC, suggested that new member states from CEE should not view the commission’s actions as stemming from a lack of trust in government estimations. In fact, quite the opposite is true, according to Stec, who explained that in this case the EC is applying an equal approach to all members by approving lower emission caps than those proposed originally, and by proposing small increases on verified 2005 levels.

“It’s the new member states who are asking for special treatment for their continued economic growth, but under the 2003 Directive on Emissions trading this is not a valid criterion,” said Stec. “In their complaints, new member states from CEE are claiming that the EC decision is discriminatory to their growth. What’s sad is that the version of growth they have in mind is the traditional, highly polluting one. If the [European] Court decides in their favour, it will certainly have a negative impact on Europe’s ability to be a leader in the field of climate change.”