The European Union´s Climate Policies: The effects of the global financial crisis and other realities Dr. Gabriel Calzada Associate Professor of Economics, King Juan Carlos University President, Instituto Juan de Mariana 13th November 2008. Washington D.C.
EU´s/Kyoto´s cap and trade scheme Reality: the “benefits”
Reduction of 0.07 degrees Celsius if every country meet its target
No EU has not reduced emissions since Kyoto was signed
EU (15): increased (not decreased) since kyoto
Spain: 50.4% increase (about 40 since Kyoto)
EU doubles US rate of increase
Kyoto countries vs US
EU´s/Kyoto´s cap and trade scheme Reality: “low cost”
Narbona´s promise: “ The government has designed a gradual process to change the tendency […] and the bill that companies will have to pay starting next year in the emission market will collectively cost a maximum amount of 85 million euros per year.” [10/2004]
IJM estimated between 4 and 7 billion Euros (10-16 times what Narbona claimed)
PWC estimated 15 billion (35 times)
Government finally gives up: could be more than 3 billion Euros
Lesson: policymakers can determinate cap or cost
EU´s/Kyoto´s cap and trade scheme Reality: jobs
Loss of competitiveness and job exportation
Companies are closing down
e.g., Valencia: The Valencia regional administration ordered the shutdown of three companies for violating the Kyoto protocol, as they tried to begin new production without greenhouse gas allocations, of which there were no more
Other companies are moving away
e.g., Acerinox S.A.: Acerinox, second largest stainless steel company in the world decided to severely reduce investments in its Spanish factory and increase the investment in its Kentucky plant expressly because of the ETS burden and related blackouts
for the same reasons Acerinox bought factory in South Africa and is looking to move part of its Spanish capacity to Eastern Europe.
Acerinox ex president (now retired), Victoriano Muñoz, had repeatedly warned that Kyoto CO2 rationing scheme “would place Spanish industries in a very grave situation”.