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The European Union has been leading international efforts to fight climate change since global

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warming first moved onto the political agenda in the late 1980s.

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Europe has been instrumental in the development of both the United Nations Convention to Combat

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Climate Change and of its Kyoto Protocol.

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A hundred and sixty-nine countries have ratified the protocol, and thirty-five industrialized

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nations among them have committed to reducing their greenhouse gas emissions by an average

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of five percent from 1990 levels by 2012.

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The European Union has gone further and committed itself to an eight percent cut.

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Climate Action Network coordinates the position of a large number of European pressure groups

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on climate change.

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It's clear that the European Union holds a leadership position internationally when it

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comes to climate change.

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They've been pushing the issue at the international level, helping to get the Kyoto Protocol in

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place and getting it enter into force.

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When the United States elected a new president, Mr. Bush, then they went, they walked away

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from the Kyoto Protocol.

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And it was very important to rescue that huge negotiation effort in order to get the first

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policy actions put in place.

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To ensure it meets its Kyoto target, the European Union has developed a major program

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of measures to cut emissions.

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These range from reducing CO2 emissions from new cars and using more biofuels to setting

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energy performance standards for new buildings.

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By far the most important and innovative of this program of measures has been the creation

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of the EU Emissions Trading Scheme, the world's biggest international trading system and now

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the cornerstone of Europe's efforts to fight climate change.

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It covers almost 50% of CO2 emissions in the European Union.

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Launched in 2005, the scheme restricts the amount of CO2 emitted by the most polluting

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industrial installations by giving them a limited number of emissions allowances.

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Companies have a permanent incentive to minimize their emissions because they're allowed to

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sell any allowances they don't need.

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The scheme's flexibility lets companies achieve reductions in the most cost-effective way.

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A company that faces exceeding its emissions limit has a choice between investing in cleaner

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production methods, buying additional allowances on the market from a company with quota to

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spare