European Union takes lead in tackling climate change with historic pact

Europe has taken the lead in fighting the war against global warming with European Union (EU) leaders on Friday backing a package of laws aimed at slashing the bloc's emissions of greenhouse gases.

''This is historic, what is happening here. You will not find another continent in the world that is giving itself such binding targets,'' French President Nicolas Sarkozy, who chaired the summit in Brussels, said. ''Europe has passed its credibility test. We mean business when we speak about climate,'' European Commission chief Jose Manuel Barroso exulted.

The EU pact is expected to encourage similar moves around the globe. The EU was credited with saving the UNFCCC's Kyoto Protocol from oblivion after Bush refused to ratify it in 2001. At Poznan, Poland, where world leaders are meeting to frame a similar pact for the whole world, this news was especially encouraging.

Nathalie Kosciusko-Morizet, France's junior environment minister, told reporters in Poznan that the deal would send a powerful signal to the rest of the world. "Beneath its outward unity, its political unity, Europe is very diverse, with very different situations with regard to energy and industry," she said. "So if Europe achieves this, the world can also do it. Obviously, the means will be very different, but the goals eventually converge."

Response from other world leaders was also encouraging. US Senator John Kerry, president-elect Barack Obama's point man at UN environment talks in Poland, said new climate pact was ''very exciting'' and "an enormous act of leadership" that blazes a path for the entire world.

"The EU today said, 'yes, we can and here's how,' and that's pretty good," Kerry told the press as ministers prepared to wrap up 12 days of talks on preparing a global climate pact to be signed in Copenhagen next December.

But environmental groups reacted with dismay, saying the laws were so watered down that they would not do the job they were written for. The EU's compromise is so full of concessions to industry and national interests that it is 'abysmal' and 'betrays EU climate policy,' environmental group WWF said in a statement.

The laws approved in Brussels bind EU member states to cut their emissions of the gases which cause global warming to 20 per cent below 1990 levels by 2020, the most ambitious pledge on climate change yet made by any world power. It has been called the "20-20-20" deal. Sarkozy said the targets had not been diluted during negotiations amid calls by several states for amendments to the initial package at a time of recession.

EU leaders say that puts the bloc in a powerful negotiating position ahead of world talks on a deal on climate change, to be held in Copenhagen in December 2009. 'Europe must lead the way so that other countries feel that they must follow in the run-up to Copenhagen,' British Prime Minister Gordon Brown said during a break in the talks.

Ahead of the Brussels summit, diplomatic wrangling over the package had become intense, with member states grappling over the key questions of who should pay for the package and how they should protect their most important industries.

On Thursday, the French government, which holds the EU's rotating presidency, set out a compromise proposal aimed at placating those concerns by offering concessions to a broad swathe of member states. Poland, for example, was reassured that its coal-fired electricity generators would be given a generous free allowance of permits to emit carbon dioxide (CO2, the main greenhouse gas) until 2020.

Britain won a 50-per-cent boost in EU support for the creation of a new generation of power stations that would pump their CO2 underground - a technology that is seen as critical to global efforts to fight climate change.

Slovakia and its fellow-EU members from Central and Eastern Europe were offered a handout of 2 per cent of all the emissions permits to be auctioned in the EU because their emissions slumped after the fall of Communism - an 'effort' which they insisted should be rewarded.

Germany and Italy were assured that their industries would be protected from competition from countries with less stringent climate laws by being awarded free emissions permits of their own.

And wealthier states such as Sweden and Belgium were assured that they would be able to count emissions-reductions projects that they sponsor in the world's poorest countries towards their own national emissions-reduction targets under the EU laws.

Member states were quick to back the proposals, reaching agreement in two rounds of talks on Thursday evening and Friday morning. 'I don't like to get exhausted staying up until 4 in the morning to negotiate on peanuts ... Having chaired eight hours yesterday, it was useless to go beyond that,' Sarkozy said.

The package now goes to the European Parliament for what should be the final vote on the issue on Wednesday. But given the scale of the concessions the package makes to member states, diplomats warn that parliamentary approval cannot be taken for granted.