Potential should not be ignored -- Wind lobby on emissions trade

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Germany's wind energy association is viewing a proposal for a trial carbon emissions trading system in the country with interest. "If it is more successful in encouraging wind energy than what we already have, then we are for it," says Heinrich Bartelt of the Bundesverband Windenergie, in Osnabrück. "We have to admit, without prejudice, that the system is well-thought out and dovetails into the market system," he says. "We are examining it critically and will embrace it if it functions well." His comments were made on the heels of pressure applied on the government by the Green Party to consider a trading system for carbon emission reductions or "get left behind in the international climate debate."

The Greens Party's environment spokesman, Reinhard Loske, is urging the creation of a German Emissions Trading Group (ETG). "Other countries like Great Britain already have such projects," he says. The group, consisting of companies, industry associations and government representatives, could work out a trading system for carbon emissions reductions. This could be later tied into Germany's eco-tax system and to voluntary industry pledges to reduce CO2 emissions. He hopes to see four or five large companies launch an internal emissions trading system to gather the necessary experience.

Bartelt warns, though, that a competitive carbon trading system would lead to concentration on the most economic technologies. Wind and hydro energies would win over photovoltaic, geothermal and biomass energies would lose. "Germany does not want this," says Bartelt.

He also fears that extreme competition leads to the concentration of large projects at prize locations which can jeopardise public acceptance and thus planning authorisation. "Renewables are decentralised and you'll tend to have trouble getting planning permission unless the local community is with you," he says.

Despite these qualms, BWE is a part of discussions on carbon trading with non-governmental organisations prior to the sixth conference of the parties on climate change (COP6) at the Hague in Holland in November.

Loske urges for work on a carbon credit trading system to begin soon. He points out that the aim at COP6 is to lay a framework for global emissions trading to begin in 2008. The EU has set 2005 as its start date. Germany will miss out on the "early mover advantage" if it does not engage in an "unprejudiced, intensive and open debate about options and uses of emissions trading," warns Loske.

Phased approach

The first phase of the German ETG project, defining the rules, should be complete by mid 2001, Loske suggests. Phase two would test emissions trading within a project group and phase three, to begin between 2003 and 2005, could see a general introduction of emissions trading in the industrial sector.

"Energy utilities, and energy intensive users from heavy industry, the Deutsche Bank and the two German electricity exchanges, LPX in Leipzig and EEX in Frankfurt, have already shown interest," continues Loske. Failure to meet climate targets is currently not penalised, so enthusiasm for investing in carbon emission reductions is limited, but the important thing is to gather experience with a pilot project, according to Loske.

Germany is committed to reducing CO2 emissions by 25% by 2010 compared with levels in 1990. So far a cut of 15.5% has been achieved, largely due to the so-called "wall-fall" effect arising from the collapse of industry in the east after the re-unification of Germany.

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