According to an opinion poll, more than half of Denmark’s population has little or no confidence that world leaders will strike an agreement on fighting climate change at December’s landmark United Nations summit in Copenhagen.  It is just a hunch, but I reckon one impulse behind this pessimism is the widespread European suspicion that China, which recently overtook the US as the world’s biggest greenhouse gas emitter, will play an unconstructive role at the talks.

What if this suspicion is unfounded?

China’s official position is that the US, Europe and other developed regions bear the primary responsibility for cutting emissions.  In spite of its rapid economic growth, China regards itself as a relatively poor country that, on a per capita basis, consumes much less energy than the developed world.  China had no binding emission targets under the 1997 Kyoto Protocol and may well refuse to accept such targets at Copenhagen.

But too few Europeans recognise that China’s leaders know they have a climate change problem and fully intend to deal with it.  According to the authoritative International Energy Agency, Chinese carbon emissions from fossil fuels soared by 129 per cent between 1990 and 2005.  Coal accounts for 70 per cent of China’s energy consumption and oil for another 20 per cent.  As China’s economic growth continues, so will the country’s urbanisation, a process that will greatly increase demand for energy.  Curbing emissions is now a national necessity.

China’s leaders certainly do not take kindly to lectures on climate change from politicians in the developed world.  However, as Duncan Freeman and Jonathan Holslag argue in a recent paper for the Brussels Institute of Contemporary Chinese Studies, this doesn’t mean the Chinese authorities haven’t given serious thought to the question.  For example, the 11th Five Year Plan for 2006-2010 set a target of a 20 per cent cut in energy intensity per unit of gross domestic product by next year.

Under a 2007 initiative, China aims to increase the share of renewable energy in total primary energy consumption to 10 per cent by next year and 15 per cent by 2020.  China is often portrayed in Europe as a country so hell-bent on economic growth that it is opening one new power plant every week.  Less well-known is that China operates a shutdown programme that in recent years has closed more than 7,000 small and inefficient power stations.

As in Europe, Chinese leaders are trying to use their fiscal stimulus, adopted to tackle the global financial crisis and recession, as an opportunity to put a “green” accent on industrial policies.  According to analysts at HSBC bank, about 38 per cent of China’s package is “green”, covering investments in railways, power grids, the environment and energy efficiency.

The European Union, which adopted a widely publicised climate change plan in December 2008, likes to portray itself as the world leader in the field.  Increasingly, however, what distinguishes the EU from China is method, not content.  The Europeans, multilateralists by instinct, like to set things down in binding international agreements.  China, notoriously prickly about its sovereignty, is less keen on this approach.

But this doesn’t mean China isn’t determined to fight climate change.  It just means China’s policies will be driven by domestic considerations rather than international pressure.

What should be the top five priorities of the next European Commission?

1) Top of my list is the defence, and if possible the strengthening, of the single European market.  This is the European Union’s bedrock achievement.  It secures prosperity for its citizens, and it underpins the EU’s collective weight in the world.  Without the single market, the EU would lose not merely its cohesion but its very reason for existence.  The single market is under strain at present because of the emergency measures taken over the past year to prop up Europe’s banking system.  These have, in effect, suspended the EU’s state aid rules in this sector.  The Commission will need to be tough in making sure that EU governments do not manipulate the rules as the emergency measures are gradually withdrawn.  Meanwhile, it should continue to press the case for integrating and liberalising the EU’s service sector, which accounts for two-thirds of all EU economic activity.

2) In second place is the need to propose useful reforms to the EU’s system of financial market regulation.  I stress “useful”, because the legislative initiatives put forward so far range from very good to mediocre.  The first category includes the creation of a EU-wide systemic risk-monitoring agency and new EU supervisory authorities.  The second category includes the proposals for clamping down on hedge funds and private equity.  These had little or nothing to do with the causes of the financial crisis.  The Commission is understandably under populist political pressures to take aim at easy targets, but it needs to be more courageous and redraft its proposals.

3) Third is a sharper definition of the Commission’s climate change and energy security policies.  Under José Manuel Barroso’s leadership, the Commission has done a good job of raising the profile of these areas.  But in my view its effectiveness has been diminished by having three separate commissioners for energy, the environment and transport.  Transport policy, in particular, is considerably less “green” and less ambitious than the EU’s rhetoric implies.  The idea of appointing a “super-commissioner” for energy and climate change has been around for quite a while in Brussels.  Now is the time to put it into practice.

4) Fourth is the task of ensuring that the Commission president and the EU’s foreign policy high representative - not to mention the EU’s first full-time president - do not tread on each other’s toes and make a mess of the EU’s relations with the outside world.  I am assuming here that the Lisbon treaty will come into effect next year.  Under the treaty’s terms, the next foreign policy chief, replacing Javier Solana of Spain, will double up as Commission vice-president.  The scope for collisions with the Commission president is obvious.  Another thing that needs sorting out is whether the foreign policy job will be purely diplomatic and political in nature, or whether it will have influence over areas such as humanitarian aid, enlargement and trade.  Up to now, these have been the preserve of different commissioners, but they are clearly intimately linked with the conduct of EU foreign policy.

5) Fifth and finally - but this is just a baffled observer’s thought - it might be a good idea for the Commission to get itself a president for the next five years.  Is anyone in the European Parliament listening?

Excuse the pun, but the Arctic is a hot topic in Brussels these days. So hot that I and many others struggled through wintry rain and darkness this morning to hear Elisabeth Walaas, Norway’s state secretary for foreign affairs, give a talk on the challenges facing the High North.

By now, the facts are well-known. The Arctic region is thought to contain huge energy resources, perhaps as much as 20 per cent of the world’s undiscovered, technically recoverable reserves. In an age of dwindling fossil fuel supplies, the temptation to exploit these resources is irresistible.

But the Arctic environment is exceptionally fragile. Global warming is already taking a severe toll. The ice and permafrost are melting. Ocean levels are rising. New shipping routes will open up. Fish stocks will move among different national jurisdictions, raising questions about how to stop uncontrolled harvesting. To cap it all, the US government declared last May that polar bears were an endangered species.

Meanwhile, territorial disputes hang over the Arctic. Canada and the US, for example, disagree about whether the Northwest Passage is an internal Canadian waterway or an international strait. This is no small matter. Once the passage is fully open, shipping companies will be able to knock thousands of nautical miles off their vessels’ journeys between Asia and Europe. Regulating the inevitable surge in maritime traffic will be a heavy responsibility.

The case for a strong international legal framework to govern the Arctic seems unanswerable. But here’s what Walaas said: “As we [in Norway] see it, there are no legal gaps in the Arctic that need to be filled, and no need for a new comprehensive international regime to govern the Arctic. What’s needed is effective implementation of what we’ve got.”

By this, she meant above all the 1982 United Nations Convention on the Law of the Sea, but also several lesser codes and forums such as the 1992 Convention on Biological Diversity, the 1995 Fish Stocks Agreement, the Arctic Council (to which the European Union has applied for observer status) and the International Maritime Organisation.

All other Arctic states agree with Norway that the existing agreements are sufficient. For the US, former president George W. Bush made that plain in a national security directive adopted only one week before he left office. The main argument is that, unlike the Antarctic, where a treaty system dating to 1961 governs international conduct, the Arctic is an ocean under ice and falls under the scope of the Law of the Sea.

It’s interesting that the odd man out in this debate is the European Parliament. By a big majority, it passed a resolution last October calling for an international treaty for the protection of the Arctic. Legislators were fearful that Russia, in whose territory large amounts of the untapped energy reserves lie, wouldn’t extract the oil and gas without damaging the Arctic environment.

But if Walaas and others are right, then it would help if the US government were finally to ratify the Convention on the Law of the Sea. George W. Bush’s administration wanted to, but Senate conservatives thwarted him. Now John Kerry, the incoming Senate foreign relations committee chairman, says he will push for ratification because the Arctic is “a strategic priority for our nation”.

Will this be another area where Barack Obama’s arrival in the White House will make a difference?

How much will it cost the European Union to fight global climate change? Clearly, the answer depends on what your target is, how you propose to get there, and the size of the EU’s contribution compared with those of the US, China and so on. But a new report from the Centre for European Policy Studies thinktank offers some useful estimates.

The report assesses six recent studies, ranging from the Stern Review and a World Bank analysis to research prepared by Vattenfall, the Swedish energy company. In these reports, the average annual global costs for mitigating and adapting to climate change are put at anything from €230bn to €614bn, based on 2006 data.

The EU is not, these days, one of the world’s great polluters. In 2004, the global economy emitted about 49bn tons of greenhouse gases (measured in CO2 equivalent). The share of the 27-nation bloc was only 5.2bn tons, or 10.6 per cent.

However, as western Europe is one of the world’s richest areas, and as Europe has historical responsibility for the CO2 emissions of its industrial heyday, the EU will surely have to pay more than 10.6 per cent of the global costs of fighting climate change.

According to the CEPS study, the smallest bill the EU could expect to pick up is €24.4bn a year, while the biggest is €194.3bn. The thinktank’s own estimate, based on what it calls “the limited likelihood of a global burden-sharing according to current emissions”, is that the EU will face annual costs of at least €60bn.

This figure is close to the forecast provided by the European Commission last January, when it published its all-encompassing proposals on energy and climate change policy. At the time, the Commission said €60bn - or about 0.5 per cent of the EU’s annual GDP - might seem a lot of money, but the cost of doing nothing would be even higher.

Has the message got through, I wonder, to Germany’s car manufacturers and their friends in the European Parliament? This week the legislature’s industry committee tried to weaken a Commission proposal for capping CO2 emissions from new cars.

Rather than imposing a target of 130 grams per kilometre on all new cars by 2012, the committee voted to apply it to only 60 per cent of new cars and to delay full introduction of the target until 2015. The vote was unmistakeably aimed at helping German carmakers, whose models are bigger and less “green” than those of France and Italy.

This is, of course, hardly the last word on the subject. The parliamentary committee’s vote isn’t binding. But when it comes to converting the EU’s high-sounding principles on climate change into concrete legislation, the devil is always in the detail.

Read a European Commission document closely enough, and there’s usually a nugget in it somewhere. In the case of Tuesday’s communication on rising global food prices, it was to be found in the final paragraph, which asked the question: Should the EU drop its biofuels target due to rising food prices?

European Union leaders committed themselves last year to producing 10 per cent of their road transport fuel by 2020 from biofuels. Among scientists, car manufacturers and green campaigners, not to mention several EU governments, it was always a contentious target. But the Commission reaffirmed the goal in January, describing biofuels as one of the few measures “realistically capable of making a significant impact on greenhouse gas emissions from transport”.

The tone of Tuesday’s message from the Commission was subtly different. It stated: “The target has never been to reach 10 per cent biofuels at any price. It is 10 per cent biofuels under strict conditions. Those conditions include a workable and robust sustainability scheme, and commercial viability for second generation biofuels…”

In a word, the Commission is putting more emphasis now on the question of “sustainability” - that is, whether biofuels can be produced in a way that does not degrade the environment - and less on the 10 per cent target itself.

To some extent, the switch of emphasis reflects the pressure that the EU feels under from those who argue volubly that biofuels production is driving up world food prices and damaging the environment at the same time. But some EU governments would no doubt heave a private sigh of relief if the 10 per cent biofuels target were to be put to one side. 

Significantly, the target is also coming under criticism from influential political circles in the European Parliament, which would have to approve the 10 per cent goal for it to become law.

All of which raises the question of whether the first big hole is being blown in the EU’s campaign against climate change. Adjusting the biofuels target should, of course, be a matter of simple common sense. It ought not to involve a massive loss of face.

But climate change is a war in which the EU likes to lead the world from the front - partly because it is neither willing nor able to handle real wars. Any climbdown from the biofuels target is bound to be seen as an embarrassment for the EU. That’s a pity, but if truth be told the risk of red faces has been growing for more than a year.

There has been much talk of the Franco-German motor that has traditionally propelled the European Union breaking down recently. So the cancellation of a meeting last week between the two countries to discuss proposals to cut pollution from cars led to plenty of puns.

The German press said the process has stalled but the French government said that was overblown. Whatever happens, the two biggest automakers in the European Union will have to strike a deal over  whose companies will have to make the biggest changes to ensure the European Union meets - or at least comes close to - its climate change targets.

The gas-guzzling, supercharged German machines have a head start. Angela Merkel’s government has made clear that the continent’s biggest producer cannot accept European Commission plans for swingeing fines from 2012 for manufacturers who do not hit targets. Brussels’ draft directive calls for a 25 per cent cut to an average emission of 120g or carbon per kilometre by 2012.

Savvy punters in Brussels expect the date to slip to 2015.  The European parliament, its members having one eye on the car plants in their constituencies, has already voted in favour of this.

ACEA, the carmakers’ lobby group, argues that since it takes five years to design a car they need that time to come up with the necessary models. And 6 out of 10 cars on the road now will still be on the road in 2012. Arguments that ACEA itself signed up voluntarily to such a target a decade  ago are rebutted. Governments did not keep their side of the bargain through tax breaks, improving congestion and other measures to encourage consumers to embrace smaller cars, it says.

France, like Italy, makes smaller cars so is closer to the 2012 target and has less to lose. However, it also inherits the presidency of the EU in July and is desperate for some big successes. They are not going to come without German co-operation. France wants an outline deal by the time EU environment ministers meet in June.

Gloomy Commission officials and green groups expect a compromise that would put the EU even further off course from its target of cutting emissions by 20 per cent between 1990 and 2020. The meeting may have been cancelled but a Greenpeace protest went ahead. Transport is the only sector where emissions are growing and the European Environment Agency has already determined that the Commission’s car package is not radical enough.

If one sector does less, then others must do more. Allowing cars to burn more carbon will mean factories, power stations or households will have to burn even less.

This race is nowhere near as predictable as a grand prix, however. As one of those behind the wheel observed, national trade-offs between issues can produce unpredictable results. This race will be won on the last bend.

Thursday’s thundering Financial Times editorial on the food crisis unfortunately arrived too late to change opinions on the 13th floor of the Berlaymont, the European Commission nerve centre. The day before the call for a pause in the push for biofuels was made Jose Manuel Barroso, Commission president, defended the policy.

He said the use of crops for fuel had so far had little effect on higher food prices. It can’t be often that the Commission disagrees with its multilateral brethren, the IMF, World Bank and United Nations.

Barroso said the push to increase biofuels to 10 per cent of the EU transport fuel mix by 2020 will continue. In fact, by creating a market for sustainable biofuels the EU could improve their production round the world, he said.

Perhaps he will listen to the EU’s own scientific advisers. On Thursday advisers to the European Environment Agency called for the target to be scrapped.

“The overambitious 10 per cent target is an experiment, whose unintended effects are difficult to predict and difficult to control,” they said.

However, Barroso did warn of a human tragedy caused by high food prices and called on EU countries to lift their giving to affected countries.

The link between the EU policies and food shortagesis beginning to worry some in the Berlaymont. It is seeking to end export subsidies that see cheap food dumped on poor countries. However, there are still many high tariff barriers that prevent poor farmers exporting to the EU. Doubtless this debate will become a centrepiece of the haggling over the mid-term review of the common agricultural policy this year.

France is already talking about the need for “food security” while Franz Fischler, former agriculture commissioner who keeps on top of the issues, told me recently that Europe has a duty to feed itself and the world.

Meanwhile, Andris Piebalgs, the energy commissioner, has been making the case for stimulating investment in farm productivity through the biofuels target.

He wrote in a recent blog post: “Substantial tracts of arable land lie fallow since the collapse of the collective farming system used during Communist times in many of the new Member States. The EU’s ambitious but realistic 10% target will provide the market pull stimulation that these farmers need to face a future market based agricultural economy and less dependence on EU subsidies.”

But with Gordon Brown among others calling for a change of stance, I wouldn’t advise any farmer to start sowing the seeds of biofuel crops until they are sure of exactly what they will reap.

Jose Manuel Barroso, president of the European Commission, promised us a “new industrial revolution” last year and it looks as though he might just deliver.

Barroso seized on climate change as a new raison d’etre for the bloc on its 50^th birthday, now that war between its members was a distance memory. An economy built on fossil fuel would have to be weaned off it, he said.

No one really believed him, though the club’s 27 members were dragged far enough along, with differing levels of enthusiasm, to endorse fairly stiff targets for greenhouse gas reductions – a fifth below 1990 levels by 2020.

The potential gains are great, but the pain is also becoming clear, and as the Commission prepares to deliver its medicine on January 23 howls are growing louder around Europe.

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