Treaty of Lisbon (No. 8)

After listening to that splendid eulogy on behalf of Europe, much of which I agree with, I want to take a different line, while recognising that Europe is, as the right hon. Member for Suffolk, Coastal (Mr. Gummer) said, absolutely central to our purpose. It is ridiculous to have any other view. The problem for the EU in regard to climate change is not that there is a need for a new constitution or amended treaties—although I welcome the warm words, albeit only six of them, in the Lisbon treaty, because they are worth having—but that it does not yet have a policy on climate change that is working. The policy is built on the EU emissions trading scheme, which has so far clearly been a failure. The EU policy is also based on a regulation of car emissions that so far has been voluntary and therefore ineffective. The policy excludes aircraft from any regulatory scheme, which means that airline emissions continue to rise extremely fast. Finally, EU member states have a burden-sharing arrangement for reducing greenhouse gas emissions, but only three of the EU 15 countries are on track to meet their targets by 2010. The key EU policy has clearly been the emissions trading scheme. In phase 1, more permits to pollute have been printed than there is pollution. As a result, emissions across the EU from installations covered by the ETS have actually risen by nearly 1 per cent. The lesson has been learned, of course, that the real problem has been over-allocation during phase 1. However, just as one loophole is beginning to be closed—and I am afraid that phase 2 is doing far too little to close it when it comes to the level of auctioning—another, even larger loophole has opened up. In phase 2, member states will be permitted to import external Kyoto credits from developing countries in order to meet their carbon reduction targets. That might be acceptable if the credits reflected actual emission cuts, but many of them are generated from projects in developing countries that would have gone ahead anyway. In other words, there is no additionality, and the result will be that those credits will increase pollution.