The European Commission warned on Wednesday, Jan. 28, that global warming might be more devastating than previously thought and stressed that any market system to slash emissions and make them more costly must include developing nations in the long run.
The statements are part of a report drawn up by the Commission which it hopes will replace the Kyoto Protocol to fight climate change which expires in 2012.
Powers such as China and India, which are not members of the Organization for Economic Cooperation and Development (OECD), should join such a system no later than 2020, the report says.
The wealthy world should also offer developing countries substantial funding to help them cut their emissions, so that the world can reach a deal on fighting climate change at a conference in Copenhagen in December, the European Commission said as it set out its negotiating platform for the Copenhagen talks.
"Without a credible financial package, it's clear that there will be no deal in Copenhagen: no money, no deal," EU Environment Commissioner Stavros Dimas told journalists in Brussels.
Green groups: proposals don't go far enough
But environmentalist groups criticized the proposals as too vague and under-funded, with Greenpeace accusing the commission of backing down on a call for rich countries to offer poorer ones at least 30 billion euros ($40 billion) a year in climate aid by 2020.
The lack of specific funding targets shows that the EU is "unable to put its euros where its mouth is," Greenpeace said in a statement, while fellow-green group WWF said that the question of specific sums of funding would be the "make or break issue" in Copenhagen.
In 2005, the EU set up a system capping the amount of greenhouse gases the bloc's heavy industries could emit and allowing firms which reduced their emissions to sell the surplus emissions permits -- the world's first greenhouse gas Emissions Trading System (ETS).
The commission proposal calls on all 30 OECD members -- countries such as the United States, Japan and South Korea -- to set up a similar ETS by 2013, and to allow permits to be traded between them by 2015.
Rich states should help finance poorer ones
Major developing economies, meanwhile, should draw up national plans to tackle global warming before the Copenhagen talks, and have their own ETS ready to link into the OECD one by 2020, the report says.
That is becoming an "increasingly realistic" goal, as Australia is currently setting up an ETS, with New Zealand and the US expected to follow suit, Dimas said.
The report by the European Commission came just a day after new US President Barack Obama named Todd Stern as the country's first-ever climate change envoy, confirming his plans to reverse the skeptical approach to the issue displayed by former president George W. Bush.
Clean energy research
The commission also proposed a number of measures aimed at enticing the world's major economies, both developed and developing, into a binding global deal on fighting climate change at talks in Copenhagen.
They include calling on developed economies to pledge to cut their emissions to an average of 30 percent below 1990 levels by 2020, and agree to a formula for setting binding country-specific targets based on each one's current emissions, energy efficiency and population.
The EU has already vowed to cut emissions to 20 percent below 1990 levels by 2020, and to go to 30 percent if other developed economies accept a comparable cut.
The EU's proposals also call on rich states to set up a legally binding system for paying developing countries to fight climate change, either by agreeing rules and targets for bilateral aid or by sharing some of the revenue from the sale of emissions permits.
It calls on countries to double investment in clean-energy research by 2013 and quadruple it by 2020, and to raise spending on climate-change issues by 175 billion euros ($230 billion) a year by 2020.
In return, developing powers should curb their emissions growth so that they release between 15 and 30 percent less greenhouse gas in 2020 than they would do if they pursued their current policies.
Blueprint faces tough hurdles
The commission also called for the tightening of a system which allows rich countries to gain credit for sponsoring emissions-reduction projects in poorer ones, making it harder to claim such credits.
Such projects would be limited to the poorest countries, cutting out rising powers such as China, India and Brazil.
EU officials say that the wealthiest developing countries are already richer than the bloc's poorest members, such as Bulgaria and Romania, making it only fair for them to pay for their emissions.
But the EU report will have to pass two tough political tests if it is to have any chance of global acceptance.
First, it will have to be approved by the EU's 27 member states, who are currently reeling under the impact of the global financial crisis, and who have little appetite for expensive new initiatives.
They then have to win approval from all major world powers in Copenhagen -- a negotiation which promises to be anything but simple.