WARSAW (Reuters) - Poland may seek to delay a European Union deal on fighting climate change as experts warn the government that the plan will harm the country’s growth, fuel inflation and, possibly, undermine efforts to adopt the euro.
France hopes to clinch an agreement on the EU flagship program during its presidency over the EU in the second half of 2008, but Poland believes April or May, 2009, may be a more realistic target as the plan needs deep revisions.
“It is better not to rush things. It is better to have a better deal later,” European Affairs Minister Mikolaj Dowgielewicz told visiting foreign reporters late on Monday.
“We should not rush into a deal just to have it and then wake up to discover that it has very bad consequences and undermines people’s confidence in the EU.”
Reaching an agreement around April next year would allow it to take into account the stance on climate change of a new U.S. president due to be elected in November, he added.
EU leaders agreed in 2007 to cut emissions of greenhouse gases by 20 percent, compared with 1990 levels, to fight global warming, and to get 20 percent of energy from renewable sources.
Legislation spelling out how to achieve the targets is now being negotiated among the EU’s 27 governments and the European Parliament. The governments’ decisions are taken by a qualified majority so Poland alone cannot block a deal.
Poland is one of several east European countries suing the European Commission to get more carbon emissions permits for their coal-dependent industry and so cut the cost of the bloc’s climate change targets.
Dowgielewicz said he was worried by a report by accounting firm Ernst and Young on the impact of the program on Poland, as proposed by the European Commission, which forecast Poland’s fast economic growth would be hit and inflation boosted.
“It may be a major obstacle to Poland’s efforts to join the EMU (European Monetary Union) by creating a big stagflationary shock,” Ernst and Young partner Krzysztof Rybinski, who had served as the Polish central bank’s deputy governor, told reporters.
Poland has no official target to adopt the euro, but some government officials have said it could be in 2012. To achieve that Poland will have to meet tough criteria, among others on inflation and budget deficit.
The report forecast the EU climate package would lower Poland’s gross domestic product by nearly 15 percent by 2030 and boost electricity prices for households by more than 40 percent.
The Commission says the increase in power prices is unlikely to exceed 15 percent for Poland and the environmental benefits of the plan by far outweigh its cost.
Dowgielewicz reiterated that Poland would be especially hit by the plan because 95 percent of its electricity is produced from coal, which emits more carbon dioxide than other power sources such as gas and nuclear.
He confirmed Poland opposed full auctioning of emissions permits to the power sector from 2013, under the planned emission trading scheme, saying the system should be phased in until 2020.
Poland also wanted an additional 10 percent emission quota for the EU’s poorer countries and another 10 percent quota for countries that have achieved the best results so far in reducing carbon dioxide output.