Copenhagen failure ‘a threat to UK manufacturing’

In particular, the manufacturers' organization EEF said it had hoped that a sectoral approach would be considered in Copenhagen. By targeting key sectors on a global basis, competitive concerns could have been addressed in a rational way, underpinning an effective agreement by helping to broaden participation in global emission reductions. However, resistance by a small number of developing countries saw this proposal dropped in the last week of the talks. The European Commission is now due to review the EU Emissions Trading Scheme in light of the outcome of Copenhagen. EEF head of climate change and environment policy Gareth Stace said UK industry had already made a significant contribution to reducing emissions and addressing climate change. "But we desperately need clarity in the direction of policy with efforts made to ensure that competitors face similar carbon constraints and costs, regardless of where in the world they are situated. The final deal means we are as far from that as is possible and leaves British industry still exposed to the risk of carbon leakage." "It is now vital the EU continues to recognise that some sectors are at risk of carbon leakage and that this threat has not diminished following Copenhagen. There simply is not enough evidence of comparable effort elsewhere in the world to impose even stricter targets upon industry." EEF believes carbon leakage can occur when production or investment shifts to unregulated regimes to avoid 'carbon costs' or where UK-based industries lose market share to competitors based in countries which place industry under no carbon-related constraints. Not only did this undermine UK industry, it also undermined the success of local efforts to reduce carbon emissions by simply shifting those emissions elsewhere. It estimated that if the EU acted alone to reduce greenhouse gas emissions by 50 per cent by 2050, almost 12 per cent of their emissions reductions would be offset by emission increases in other countries. However if all industrialised countries acted together, this would be reduced to below 2 per cent.