field of climate change. But Lakshi Mittal certainly has the power to become the world’s greatest climate philanthropist if he chooses.
Or will EU citizens be paying the price?
Of course if Mittal does not act to cancel his surplus emissions permits and instead sells them to make windfall profits, then it will be the ordinary power consumer paying the price. Our major power providers are short of the permits that allow them to pollute. But at the moment it is cheaper for them to buy surplus permits from elsewhere in the EU, or pay for emissions reduction projects abroad, than to invest in making our power cleaner and greener. With its huge surpluses, ArcelorMittal will be one of the places power companies go to buy permits. So when we pay our power bills there is a chance that we are reaching into our pockets to pay windfall dividends to Britain’s richest man. There is rightly strong concern than tax payer supported banks might pay large and unwarranted bonuses to their top staff; we should be equally concerned about the case of ArcelorMittal.
Despite the windfall profits that companies such as ArcelorMittal are set to make, they are still seeking special treatment for the period from 2013 to 2020. Whilst power companies will have to buy all of their emissions permits at auction, industrial sectors have argued that they will continue to need to receive theirs for free. The steel industry claims that if it were forced to buy permits it would be cheaper to relocate production outside the EU and on this basis, has organised steelworkers to carry out street protests. This spectre of job losses has led to European politicians to deliver a raft of concessions to industry even though the risk of such relocation is actually minimal if the costs of transporting goods and of building new plants are taken into account. However, with the huge power of the industrial lobby there is a real risk that windfall profits will continue even after 2012 and that little will be done to reduce industrial carbon emissions.
The weakness of the EU’s targets in relation to industrial companies such as Arcellor Mittal may seem like an isolated problem. But if we are unable to make cuts to industrial emissions in the EU, then what chance is there of emerging economies such as China and India cutting theirs? Until polluters are asked to pay to pollute rather than being handed windfall profits, we will struggle to effectively tackle climate change. Tougher overall caps on emissions in Phase 3 of the scheme will be vital, and the European Commission, with Member States must ensure that industrial companies are set challenging targets for emissions reductions, rather than being given a free ride.
We call on Lakshmi Mittal and his company ArcelorMittal to take positive action and commit to cancellation of all its surplus emissions permits between now and 2012. This would be an unprecedented act of climate philanthropy and an example to business and industry worldwide.
We also call on the European Commission and EU Member States to ensure that in Phase 3 of Emissions Trading tougher caps on carbon emissions are put in place, and that industrial companies like ArcelorMittal are given challenging targets, rather than windfall profits.