Chris Davies MEP writes…Britain betrayed

European Union flagIt’s good to know who your friends are, and when it comes to combating climate change they don’t include Britain’s Conservative MEPs and their UKIP collaborators.  In a European Parliament vote yesterday they tipped the balance, securing the deferral and probable abandonment of attempts to ensure that the carbon market continues to function, and sending out a signal that the EU is no longer interested in promoting low carbon investments.

Europe’s emissions trading system is the largest in the world and is driving down CO2 emissions from power stations by 1.74% each year, but by putting a price on CO2 it was also supposed to promote low carbon investments and this it is failing to do.  The scale of the economic recession was not anticipated. A surplus of allowances now on the market had reduced the carbon price to €5/tonne, not nearly enough to stimulate alternative investment.

The European Commission wanted to adjust the timing of the release of more carbon allowances (‘backloading’) to stimulate the price of carbon and keep the market functioning until long term changes to the emissions trading system can be made.  They presented a minor proposal, expected only to raise the carbon price to the €8-10/tonne figure that existed last September, but the issue became totemic and a test of whether Europe wished to maintain its lead role on global warming issues.  While backloading was publicly supported by companies like Shell, Alstom, General Electric and the power generators, others argued that this was not the moment to support carbon prices.

Whatever the balance of arguments this should have been a no-brainer for British representatives.  The Coalition Government in the UK has introduced a carbon price floor for electricity generators that is set at levels above those of the EU market.  (As it happens I’m not a great fan of this independent approach – if we cut our emissions by more, other EU countries can get away with doing less – but I admire the commitment to promote low carbon investments).

With a carbon price of our own it must be in the interest of British industry to ensure that they pay a similar CO2 levy to their European competitors.  Conservative (by 22-4) and UKIP (by 10-0) MEPs decided instead to mount a self-defeating protest against both the policies of the Coalition Government and of the European Commission.  They used their votes to oppose the action that would have raised the carbon price and levelled the playing field for British industry.  The reaction of the markets was immediate; the carbon price fell to €2, increasing the disparity to the disadvantage of British business.

The vote was lost by 334-315.  If the Prime Minister had been able to persuade just ten more Conservative MEPs to vote to support government policy we would have won.

Remember those pictures of David Cameron behind a sledge pulled by huskies as the Conservative leader tried to show that his party cared about the environment?  With their votes in Strasbourg his MEPs not only killed the husky memory, they gave its corpse a good kicking.

* Chris Davies is MEP for the North West and the Liberal Democrat environment spokesman in the European Parliament

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4 Comments

  • The voting record may be found here:
    http://www.votewatch.eu/en/clarifying-provisions-on-the-timing-of-auctions-of-greenhouse-gas-allowances-draft-legislative-resol.html

    What I find interesting is firstly the UKIP MEPs actually turned up to vote, and secondly both Conservative and UKIP MEP’s voted in a way that increased the disparity between in carbon prices to the disadvantage of the UK, hardly consistent with the policies of their respective parties.

  • Tony Dawson 17th Apr '13 - 5:56pm

    “Tories and UKIP conspire to do Britain down!”

    or even:

    “Tories and UKIP vote through multi-million hand-out to foreigners”! 🙁

  • So why are you in govt with the Tories then? I know, I know there is no alternative or some such nonsense.

  • Alex Macfie 18th Apr '13 - 9:33am

    @sally: Because the parliamentary arithmetic at Westminster makes a Con-LD coalition the only option for stable government in the UK. This does not affect what either party’s MEPs do, since the European Parliament is a separate institution from the UK parliament; MEPs are not bound by the Coalition Agreement, and the European Parliament doesn’t work like that anyway. Apparently the Tory MEPs voting record on Climate Change is against stated Tory policy and manifesto commitments (never mind UK government policy). This is a problem for the Tories to sort out among themselves. From a political point of view, it is good to have Tory and Lib Dem MEPs airing their political differences in public, as it underlines the fact that they are indeed separate parties, and the Lib Dems really need to make much more political caplital out of these differences.

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