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EU Summit Concludes With Climate Pledge, Call For Financial 'Tobin' Tax

EU leaders backed a fresh call by British Prime Minister Gordon Brown (left), supported by French President Nicolas Sarkozy, to examine the idea of a global financial tax.
BRUSSELS -- European Union leaders today agreed to collectively contribute more than 2 billion euros a year between 2010-2012 toward offsetting the costs the world's developing nations will incur in cutting their greenhouse gas emissions.

Concluding a two-day summit in Brussels, the bloc also called for a global tax on financial transactions as redress for the global financial sector's past mistakes, as well as an insurance against their recurrence.

The EU's pledge -- 2.4 billion euros over three years in what is known as "fast start" funds to fight global warming -- represents an important breakthrough for the bloc.

The pledge allows the EU to reassert its leadership at the ongoing UN-backed climate change conference in Copenhagen. The bloc's push for substantial financial aid for developing nations has been undermined by its member states' inability so far to agree on concrete figures.

Climate change has been the EU Swedish Presidency's top policy priority and Prime Minister Fredrik Reinfeldt expressed his personal satisfaction at the EU decision.

'Fair Share'

The decision is also an important landmark for the EU as all of its 27 member states agreed to contribute. Poland had earlier led poorer, mainly Eastern European nations in an attempt to be exempted from contributing. Some of the contributions are, however, symbolic at best. Crisis-stricken Latvia, for example, will pay 10,000 euros annually.

Reinfeldt says the 2.4 billion euros represents what the bloc believes is its "fair share" of the estimated 5 billion to 7 billion euros developed nations will have to find every year.

The longer-term costs for advanced nations are expected to rise steeply. The EU estimates that by 2020, the world's poorer countries will need a total of 100 billion euros a year.

EU leaders today reiterated their conviction that global temperature levels must not be allowed to rise more than two degrees above pre-industrial levels if irreversible damage to the environment is to be avoided.

The bloc also said it is prepared to cut its greenhouse gas emissions by up to 30 percent by 2020 -- on the condition, however, that other rich nations do the same. Currently, the EU has committed itself unilaterally to reduce emissions by 20 percent by 2020 from 1990 levels. EU officials say a recent U.S. emissions-cut pledge, referenced to the year 2005, amounts only to some 4-5 percent of the 1990 levels.

The EU today also endorsed the idea of a global levy on financial transactions, known as the "Tobin tax."

Financial Sector 'Mistakes'

Jose Manuel Barroso, the president of the European Commission, said he believes it is fair to expect the financial sector to cover some of the costs of the economic downturn its "mistakes" had caused.

"Our taxpayers are now suffering the situation [caused by] some mistakes, to put it diplomatically, that were made by the financial sector," he said. "[It is necessary] now that the financial sector also gives a contribution to the overall economy."

However, the United States has indicated in previous G20 meetings that it will not support the idea, effectively scuppering it.

The summit today also adopted short declarations on Iran, Afghanistan, enlargement, and the Eastern Partnership, reiterating previously established EU views.

The two-day EU summit was the last to be overseen by a member state. Next year, the new president of the European Council, Herman van Rompuy, will chair the summits. The high representative for foreign affairs, Catherine Ashton, will chair EU foreign ministers' meetings.

The six-month rotating member state presidency does not disappear, however, with national ministers retaining oversight of areas such as agriculture, education, and environment.

But there are also fears that larger member states will try to use their stints at the EU helm to sideline van Rompuy and Ashton and keep some of the limelight on the world stage for their own leaders.

Spain, which will take over from Sweden on January 1, 2010, has already indicated it wants Prime Minister Jose Zapatero to chair the more than 10 EU summits with non-EU countries -- including the United States and Russia -- which will fall into its six-month presidency.