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EU carbon fix squeaks through in lucky break for Greens

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(Globalpost/GlobalPost)

By Andrew Allan

LONDON (Reuters) - There's a century-old phrase often attributed to Otto von Bismarck on laws and sausages - you never want to see them made.

Lawmakers in the European Parliament in a surprise move on Wednesday passed a bill that could have a bearing on how much Europe will pay for its energy over the next 40 years by forcing up the price of carbon allowances in the EU emissions trading scheme through cutting the supply of permits.

But they did so only after infighting among those opposed to the measure handed the tiny Green Party a swing vote on a draft law that the parliament had rejected two months earlier over fears it could harm economic growth.

The vote ends a year-long bitter dispute over future the European Union's energy and climate policy, with Climate Commissioner Connie Hedegaard saying a no vote "would have been a very, very bad day."

But the way in which it was adopted has seen opponents accuse the European Commission and some member states of pressuring MEPs to vote for the bill.

On Wednesday, European paper companies who oppose higher carbon prices, pasted leaflets in Strasbourg where the vote was held with images of Hedegaard above the words "Do as you are told!"

Eija Riitta Korhola, a Finnish MEP who has led opposition to the bill, said some nations had told MEPs they risked losing party membership ahead of next year's European elections if they did not back the measure.

"It's quite obsessive the way that this proposal has been put through. There was much pressure, not just coming from the Commission, but from member states asking members to vote in a certain way or they wouldn't be on future selection lists for their party," said Korhola, a member of the European People's Party (EPP), which controls a third of votes.

She refused to mention the countries involved.

Conversely, green groups have claimed industry has put pressure on lawmakers, threatening the bill's adoption could trigger economic slowdown and the demise of European heavy industry.

DRIVING UP PRICES

The bill allows the Commission to intervene in the market to cut the supply of permits to drive up the cost of emitting a tonne (1 tonne = 1.102 tons) of carbon dioxide and force companies to invest in clean technology such as renewable energy.

It has divided lawmakers and ministers over whether it would catapult Europe to the forefront in green investment or cause a hike in energy prices that could cripple manufacturing industry.

Subject to scores of amendments and a hugely complex voting procedure, the 21-word draft law has not enjoyed a straightforward passage, with many MEPs retrospectively changing votes and admitting to being confused as to what they were actually voting on.

Bas Eickhout, a member of the Green party, said its passage was down to poor strategic voting by the EPP, who had collectively helped defeat a weaker version that was adopted at committee stage and would have had a minimal impact on carbon prices.

"Within the EPP it was so politicized, it was a fight between different strands in the party. For a lot of people, they had no idea what they were voting about. The longer the process went on, the more politicized it got and the more complicated it got for MEPs," Eickhout said.

"I don't think if this bill was voted on again it would pass," he said.

Other MEPs agreed, with Liberal MEP Chris Davies tweeting the EPP had been so opposed to the measure they had voted down amendments that were clearly made to weaken the bill's impact.

THIRD ROUND

The bill will now be discussed between the European Parliament, the Commission and the Council of Ministers, in which most countries support the plan, although it is unclear whether it will gain enough support to become law.

Some of the EU's largest nations, such as Britain and France, back the measure, although coal-reliant Poland is opposed while Germany and Spain are undecided.

Marcin Korolec, Poland's environment minister, tweeted on Wednesday he would fight the measure in the Council to protect jobs. German Chancellor Angela Merkel has said her government will not form a position before a general election in September.

Once a compromise package is agreed it will head back to parliament for a final reading, likely in October or November, where it could face another close vote.

"I really believe that the final decision will be different, because the price tag is more visible. Then we will see whether others will vote for this when elections are coming," said Korhola.

"We wanted to give a signal that the EPP is not the group to force up energy prices. This is fertile soil for euro skepticism to grow. We don't wish to fertilize that soil any further."

(Editing by David Evans)

http://www.globalpost.com/dispatch/news/thomson-reuters/130703/eu-carbon-fix-squeaks-through-lucky-break-greens