EU pins hopes on U.S. states to act on climate change

By Gerard Wynn

LONDON (Reuters) - Europe is putting enormous faith in U.S. states to drive federal U.S. action against climate change, the top environmental aide to California Governor Arnold Schwarzenegger told Reuters on Wednesday.

The European Union on Monday accused the United States of having a "negative attitude" hampering international efforts to tackle climate change.

President George W. Bush pulled the United States out of the Kyoto Protocol on global warming in 2001, citing economic risks, but cities and states have since launched independent efforts to curb emissions and bypass the federal stand.

The most populous U.S. state, California passed last year the first significant law in the United States to curb emissions of greenhouse gases, a move Europeans hope will pre-empt national U.S. action.

"We're looking to be a model for the United States, which is also what the Europeans are hoping," said Linda Adams, secretary of the California Environmental Protection Agency, after meeting EU and European state officials on a fact-finding trip.

"There's a sense of urgency in Europe."

The world's twelfth biggest carbon emitter, California has approved a state-level emissions cap in a possible model for a regional initiative including four other western states.

The U.S. Supreme Court ruled on Monday that existing law allows regulators to slow emissions of greenhouse gases, potentially giving such regional moves fresh impetus.

"The supreme court ruling allows states to flex their muscles, so you'll see more initiatives," Adams said.

The court ruling could also unblock California's legal battle with automakers to introduce from 2009 a standard to cut auto emissions by 30 percent, and secure the state the necessary federal rubber stamp, Adams said.

Global warming is seen threatening California's people, forests and water supplies. More than a hundred people and thousands of dairy cattle died of heat stress in the state last summer, Adams said.

CARBON MARKET

Carbon markets are much favored by business as a way to tackle climate change because they can be used to make money. At present the global hub is an EU scheme.

Such markets give businesses a certain quota of emissions permits. If companies clean up and undercut their cap they can sell the surplus permits.

Advocates see a globally linked-up market as the ideal, cutting the cost of combating climate change by allowing industry to shop around for the world's cheapest permits.