The European Union announced a new plan last week to combat global warming that would set firm caps on emissions by 27 countries.
Between 2013 and 2020, the E.U. plan would reduce greenhouse gas emissions to 20 percent below 1990 levels. Gone are the national action plans that saw countries adopt schemes that protected local industries. Instead, the European Union would set individual national caps to meet the overall goal. The reduction would be bumped up to 30 percent if the
The plan would correct the faults of the previous cap-and-trade system, which gave away carbon emissions allowances and led to windfall profits for polluters while producing little in reductions. The new proposal would put a price on carbon by auctioning 60 percent of the emissions permits initially and all of them by 2020. There is a mandatory target that 20 percent of E.U. energy be derived from renewable sources, including 10 percent from biofuels. Overall, 60 percent of the European Union's total greenhouse emissions would be covered by the plan.
The E.U. plan is a long way from implementation; the hurdles include approval by the European Parliament. European Commission officials say their new carbon proposals assume a truly global agreement would be in place by the time their new rules take effect in 2013. If not, one option, similar to the proposal pending in Washington, would be to require that competing industries in countries without caps meet emission-reduction targets for goods they export into Europe. That could force them to buy emission credits on the European market -- thus boosting their costs.
But imposing tariffs on imports from countries like
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