EUROPEAN DIARY:A debate over whether to prioritise the economy or environment is raging in Iceland - and the EU, writes Jamie Smyth
ICELANDIC POP diva Björk added a touch of glamour to a conference in Brussels last week designed to boost popular support for a new global agreement to tackle climate change.
The singer gave an emotional speech about the environmental damage caused in Iceland by aluminium smelters and warned that the financial crisis could prompt politicians to fast-track plans to build more smelters to try to address the rapid economic slowdown. "Usually I don't notice politics. I live happily in the land of music-making. But I got caught up in it because politicians seem bent on ruining Iceland's natural environment," she said.
The abundance of thermal energy in Iceland has enabled it to become a global centre for the aluminium industry, attracting investments from Alcoa and Rio Tinto. The three biggest smelters in Europe are located in the country, which has a population of only 300,000.
Over the next three years, there are plans to build two more factories powered by geothermal energy. "Because of the crisis, a number of Icelandic MPs are lobbying for the environmental assessment to be ignored so that the dams can be built as quickly as possible to give Alcoa and Rio Tinto the energy they need for the two new smelters," said Björk, who argues that business needs to turn to more sustainable and eco-friendly options.
Björk's environmental campaign has attracted criticism from the business community in Iceland, which faces interest rates of 18 per cent, inflation of 20 per cent and an unemployment rate of 10 per cent as a result of the financial crisis enveloping the country.
"The aluminium industry employs more than 1,500 people and for every Icelandic krona of revenue generated, 30 to 40 per cent remains in Iceland as wages, taxes and payments for electricity, as well as other local goods and services," noted Jón Steindór Valdimarsson of the Federation of Icelandic Industries in reply to articles published recently by Björk.
The debate in Iceland over whether to prioritise economic growth or environmental protection is a microcosm of a wider debate raging in Europe over how the financial crisis will affect its own climate change targets. Last year, the EU agreed its "20-20-20" targets to cut greenhouse gas emissions by 20 per cent, boost the use of renewable energy by 20 per cent, and increase energy efficiency by 20 per cent by 2020. But as the European economy declines, there are signs that these commitments are wavering.
At last month's EU summit, several states argued vociferously that the targets would impose too much of a burden on industry. Italy said meeting the targets would cost it €18 billion a year - a figure the European Commission hotly disputes.
Other countries such as Germany and the Republic want more flexibility written into the climate package to help them meet their own emissions targets.
A deal on how to implement the targets must be hammered out in the five weeks leading up to the next EU leaders' summit on December 11th and 12th, causing climate campaigners to become nervous.
"I'm concerned about some of the information about European countries that I am hearing . . . like Italy and Germany to a certain extent because we have to understand that this is not negotiable. You cannot bail out of saving the planet," said former president Mary Robinson, who attended the climate change conference in Brussels with Björk.
Fine Gael MEP Avril Doyle, who is charged with steering a key part of the climate package through the European Parliament, says it is true that some ministers in Europe are waving the white flag because of the state of the economy. "They are simply in a state of shock because of the rapid downturn," she says. But with EU credibility on the line, she believes the overall 20-20-20 targets will not come under threat, particularly as not making the right decisions now will simply increase the cost of action in the future.
"Climate change has to be the number-one priority, even more so than the financial crisis. We have to remember that the EU package and the next global agreement to replace Kyoto are only due to come into effect after 2012," says Doyle, who believes there will be some flexibility written into the final package to enable all 27 EU states to sign up.
The Government is pushing for forests and grassland to be taken into account as carbon sinks to enable it to meet its tough 20 per cent CO2 reduction target in the residential, agricultural and transport sectors. Germany wants to ensure heavy industries that generate a lot of CO2 do not simply relocate outside the EU, while Poland wants to ensure its electricity-generating sector does not have to increase prices as a result of any deal.
But with Europe's economy expected to enter recession next year, EU leaders will face the same difficult questions that face Icelandic politicians right now. Should they make cuts for the long-term good of the planet that will probably cost jobs and stunt growth in the short term, or should they put off taking action on climate change until the economy improves?