New EU states seek court ruling allowing them to emit more CO2

An east-west split over the environment has opened up in the European Union, with six of the new member states now turning to the courts to challenge a cornerstone of the EU's climate-change strategy.

Poland, Hungary, the Czech Republic, Slovakia, Estonia and Latvia have all started legal action in the European Court to try to increase their permits to emit CO2 under the European emissions trading scheme.

The former communist countries argue that capping their emissions will harm their prospects for economic growth and make it harder for them to catch up with their richer western European neighbours.

The emissions trading scheme is supposed to deliver the EU's obligations under the Kyoto protocol and allows the buying and selling of unused carbon credits.

But Aigars Kalvitis, the prime minister of Latvia, the latest country to join the rebellion said: "We need the extra capacity". He argued that Latvia should have a CO2 emission quota of 6.25 million tonnes each year for 2008-12, which is twice what was proposed. If the six countries win the right to emit more CO2, experts believe it could throw the carbon market out of balance.

But Brussels does not seem worried about losing in court: "We are confident our decisions will stand up," said a spokeswoman, Barbara Helfferich. "The current price reflects that we have created an efficient market for carbon and are introducing the necessary steps to reduce climate change."

Some lawyers share that confidence. Candido Garcia Molyneux, of the Brussels law firm Covington and Burling, said: "Usually it's difficult for member states to win on these cases, because the Commission bases its decisions on very technical criteria and it's unlikely the Commission got it wrong ... if I had to bet I would bet for the European Commission."

But environmental campaigners worry that even a relatively speedy court case could undermine the fragile carbon market. Karim Harris, a spokeswoman at Climate Action Europe, said: "The Commission has to put resources towards fighting these suits and it takes away its resources and its focus when it should be fighting climate change."

Earlier this year, EU leaders signed up to ambitious pledges to tackle climate change: in March they promised to cut emissions by 20 per cent by 2020 compared to 1990 levels, and to help get there, to generate 20 per cent of Europe's energy from renewable sources by 2020.

But not all countries are happy. The Czech President, Vaclav Klaus, has attacked the science behind climate change. He has written that "Communism was replaced by the threat of ambitious environmentalism" as "the biggest threat to freedom, democracy, the market economy and prosperity at the beginning of the 21st century."

Britain's Foreign Secretary, David Miliband, has said the EU should be an "environmental union", although behind the scenes richer countries also worry about competitiveness.

The European emissions trading scheme is a main part of the EU's carbon-cutting strategy. It is intended to create a high price for carbon to encourage industries to develop cleaner technologies. But the scheme lost credibility last year, when the price of carbon dropped to almost zero, because countries handed out too many permits.

Campaigners are pleased the Commission is taking a tougher line. One official said: "We have treated the new member states exactly like the old ones".

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