So who is letting the side down?

The picture varies dramatically among the 15 E.U. member states that signed the Kyoto Treaty in 1997. Only Britain, Finland, France, and Sweden have met or are outpacing their Kyoto Protocol obligations. Germany and the Netherlands are responsible for slight reductions. But the overall decrease masks emission increases in other countries; Spain, Luxembourg, Austria, Portugal, Italy, and Ireland remain farthest away from meeting their Kyoto Protocol commitments.

The obstacles to achieving even better cuts in the future appear formidable. Denmark, lauded for its global lead on wind power (according to the Danish Energy Authority Web site), saw its CO2 emissions climb 16 percent in 2006. Spain’s CO2 situation is so dire it would have to cut its greenhouse gas emissions by as much as 37 percent to fulfill its climate pledges. And even as Angela Merkel was leading E.U. negotiations to push through the binding target in March, Germany’s energy industry was setting out plans for a spate of new coal-fired power stations.

Can carbon trading schemes save the day?

Brussels officials are banking on the E.U.’s vaunted two-year-old Emissions Trading Scheme to get it out of the CO2 hole it has dug for itself. But the carbon trading “market solution” – which only applies to 40 percent of the E.U. – is palpably failing. In 2006, Europe saw the greenhouse gases pumped into its skies increase by 30 million tons.

The E.U. admitted it had caused the problem by issuing too many trade certificates. In the spring of 2006, a ton of CO2 cost nearly 30 euros ($40) at the European Energy Exchange in Leipzig. By summer 2007 that price was down to less than 1 euro. By underestimating CO2 emissions, the European Commission had effectively sponsored the “right to pollute,” with industries allowed to emit more CO2 than they should have.

In June 2007, the Financial Times estimated that Britain’s electricity generators could make windfall profits of about £1.5 billion a year from the E.U.’s emissions trading scheme, and that across Europe, profits could add up to £13.6 billion a year. Carbon trading is making energy utilities rich. Just last month Anatoly Chubais, CEO of Russia’s electricity monopoly United Energy Systems, admitted that his company alone was anticipating a windfall of 700 million euros (around $934 million) under the Kyoto Protocol to combat global warming.

At the Freezerbox Journal Web site, Russian journalist Alexander Zaitchik, reporting from a carbon-trading conference in spring 2007, quoted a carbon finance executive as saying: “I don’t know if climate change is caused by burning coal or sun flares. And I don’t really give a shit. Russia is the most energy inefficient country around, and carbon is the most volatile market ever. There’s a lot of opportunity to make money.”

Europe’s dirty little secret?

To make matters worse, in June last year the New Scientist reported details of a new study purporting to show that many governments (not just European) were harboring a “dirty little secret” – emitting far more greenhouse gases than they claimed. Using a calculation method that avoided some of the sources of error used in declared national figures, Peter Bergamaschi of the European Commission Joint Research Centre at Ispra, Italy found convincing evidence that reported emissions were far too low, especially for methane, one of the worst gases. Among the worst offenders are the U.K., which may be emitting 92 percent more methane than it declares under Kyoto, and France, which may be emitting 47 percent more. Estimates for Germany’s emissions were also revised upward by 70 percent.

Bergamaschi’s calculations are supported by a similar study led by Euan Nisbet of Royal Holloway University, London, and a member of Global Atmosphere Watch. Nisbet estimates that London’s methane emissions in the late 90s were 40 to 80 percent higher than declared by the British government. As Bergamaschi comments, “Now that money enters the picture, with the Kyoto Protocol rules and carbon trading, so also can fraud.” He adds, “There will be an incentive to underreport emissions.”

Emission Impossible

Europe’s ludicrously ambitious CO2 targets and the trading schemes designed to achieve them clearly amount to an Emission Impossible. Even worse, in pursuing them, the E.U. may have taken another “world lead” – in creating a climate for global fraud which could undermine Europe’s economic and political stability far more than any costs associated with global warming.