Autor: Margo Thorning

Notwithstanding the European Union’s ratification of the Kyoto Protocol on climate change, the world’s second largest economy faces major challenges in meeting not only the Kyoto greenhouse gas (GHG) targets but also the more stringent emission reductions being debated for the post-Kyoto commitment period (after 2012). Data from the International Energy Agency (IEA) suggest that EU carbon emissions will continue to rise over the 2000-2030 period. Even with strong new policies to reduce emissions, there are almost no changes from 1999 emissions levels, according to the IEA report. The cost for developed countries to meet the emission reduction goals of the Kyoto Protocol and the tighter targets that may be proposed for the second and subsequent commitment periods will be much higher than is generally understood. Policymakers need to have access to cost estimates based on appropriate climate policy models.

This paper takes a brief look at three policy issues that have been, and continue to be, major sources of friction between the EU and the US. These are: (1) climate change policy, (2) the use of the Foreign Sales Corporation by US exporters, and (3) biotechnology.

In December 1997, the Kyoto Protocol was agreed to by the Conference of the Parties to the Framework Convention on Climate Change. Specific targets were set for individual countries. More stringent emissions reduction targets are now being considered. Germany is pushing for an agreement at the EU level to cut greenhouse gas emissions by 30% from 1990 levels by 2020. Germany is also pledging to cut its national emissions by 40% by 2002.1 The UK government’s report “Climate Change: The UK Programme” calls for reducing emissions by 95% in industrial nations.