EU upholds climate plan despite financial turmoil

Europe's financial market crisis will not interfere with an expensive plan to reduce greenhouse gas emissions across the continent, leaders of the EU pledged Thursday.

French President Nicolas Sarkozy, who currently holds the rotating presidency of the 27-country European Union, said that despite some misgivings about the cost, "climate change is so important that we cannot use the financial and economic crisis as a pretext for dropping it."

Following a two-day summit in Brussels, members of the EU agreed on a climate change package that includes measures to make heavy polluters accountable to a cap-and-trade emissions program.

Designed with major emitters such as energy generators, steel makers and cement producers in mind, the program could garner $70 billion US annually in polluter fees.

"We are not going to let up on the battle against climate change," European Commission President Jose Manuel Barroso said at the summit's close, the BBC reported.

Eight central and eastern European countries on Wednesday called on the EU to pull back from the goal of reducing greenhouse-gas emissions by 20 per cent below 1990 levels by 2020 because Europe faces "serious economic and financial uncertainties."

The countries — Poland, Hungary, Romania, Bulgaria, Slovakia, Latvia, Lithuania and Estonia — made the plea at the opening of the meeting of the European Council, the top EU decision-making body.

"We want a package that will be tolerable for the poorer member states," said Polish Prime Minister Donald Tusk.

They were later joined by Italy, which argued that the cost of polluter fees, compounded by fallout from the financial crisis, would be overly punishing for industries.

Sarkozy said he will try to lay out a plan that avoids penalizing the bloc's former Communist countries that depend largely on carbon-heavy coal for their power.

"On the climate package, we have obtained unanimity.… It is now for President Barroso and myself to find solutions for those countries which have expressed concerns," Sarkozy said, the BBC reported.

EU hopes to lead international change

The European climate-change package will be enacted in 2009, and EU leaders hope it will draw the United States and other countries into an international program for dealing with global warming.

Barroso had earlier said that the credit crisis did not justify abandoning the climate-change plan.

"Climate change does not disappear because of the financial crisis," he said.

Following closely behind those in the U.S., European financial markets have been wracked by weeks of instability, prompting the EU to put together a $2.3 trillion emergency bailout for the banking sector. Agreed to by some leaders over the weekend, the bailout was endorsed by all EU members at the summit this week.

Sarkozy and Barroso are to meet with U.S. President George W. Bush on Saturday at Camp David, Md., to lay the groundwork for a global summit on overhauling the financial system.

The Group of Eight major industrial countries and the EU have both endorsed the idea of reforming the world's financial system to prevent another credit crisis.

The G8 said the meeting should include developed and developing countries, which would include large, strong and growing economies like China, India and Brazil.

British Prime Minister Gordon Brown said Wednesday the meeting could produce "very large and very radical changes."