U.S. Angered By EU Carbon Cuts

The European Union yesterday revealed the world’s most ambitious plan to date to fight climate change.  The scheme will force member states to cut carbon emissions by a fifth by 2020.  This may place Europe on a collision course with the United States, which has accused the EU of using the measures as cover for a new protectionism.
European businesses are also unhappy with the plan.   They say it will force them to buy permits to emit carbon, and will make them uncompetitive with rivals in the US and China. But the European Commission president, Jose Manuel Barroso, stated that the environmental status quo was unacceptable. While taking action was not cost-free - and would amount to 0.5 per cent of European gross domestic product - the price of inaction could approach 20 per cent of GDP, he said.  “Procrastination is no longer an option for anyone.”
The emphasis on renewable sources of energy is most likely to lead to a large increase in solar and wind power production.  It is possible that thousands of new wind turbines will be erected, many off the European coast.
But the plan’s most controversial element is the suggestion that it could force foreign companies doing business in Europe to obtain emissions permits along with European competitors. The White House did not take kindly to this suggestion and stated that it viewed this as a potential tax on the US for its position on climate change.
The Bush Administration warned it would fight the move.  The U.S. looks likely to win British support. “There is always the danger that the protectionists in Europe - and they do exist - could use this as a kind of secret weapon to bring about protectionism,” the British Energy Minister, Malcolm Wicks said.