Geoffrey Lean: Blair's concessions could make Europe's pollution plans worthless

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The Independent Online

Tony Blair's credibility will once again be on the line on Tuesday when his government presents Britain's plans for curbing carbon dioxide emissions from industry to the European Commission.

Ministers have been watering them down over the past weeks under heavy pressure from Digby Jones, the director general of the Confederation of British Industry, even though they were specifically designed to be business-friendly. But last week, in an important speech on global warming the Prime Minister said: "We have to act, and we have to act now."

Mr Jones has called the plans - which set a limit on the amount of greenhouse gas that a firm can emit - as "hell on earth" and claimed that they "imperil every single manufacturing job in Britain".

However, Mr Blair insisted that it was "false" to suggest that there was "a trade-off between economic growth and the environment" and added that, over global warming "the costs of not acting are overwhelmingly greater than any short-term cost of action".

Conscious that their plans risked undermining trust in the Prime Minister even further, ministers are reconsidering them over the weekend. Due to be sent to the EC last Friday, the plans will now not be submitted until Tuesday.

The scheme - which the Government calls "a central plank" of its policies - was drawn up in close consultation with business and is strongly backed by leading companies, including BP, Lafarge and Dupont. Under it, companies are permitted to set emission levels. Those that fail to meet them can buy extra permits from those that have done well, creating a market in pollution. A similar scheme sharply cut acid rain in the United States and even Mr Jones has admitted that it is "the right approach".

But under his pressure, ministers have been planning to relax the limits - a move which could help undermine the whole European pollution market, making the scheme worthless.