October 22, 2008
Hungary sold the right to emit 2 million tons of CO2 to Belgium. The contract is not available to the public.
After a parliamentary questioning and media inquiries, the Hungarian ministry responsible for environment started to publish some details of the deal, claiming, that it would harm Hungary’s negotiation position in other deals under way if they would make all details accessible. (It is questionable if the government legally uses this option). According to the claims of the seller, Belgium insisted that the income will be spent on environmental investments like energy saving measure to curb future Hungarian emission. This means that even though this is not an offset agreement, it might have the effect of an offset.
Hungary is one of the pioneers of carbon trading, this deal is claimed to be the first of this kind. When the Vatican offset all of its carbon emission – a largely symbolic act – the offset was carried out in Hungary. I think this is less of a merit than a creative use of the flows of the trading system: the Central European countries successfully lobbied under Kyoto to use their pre-transition carbon levels as basis for further reductions. As the very damaging Socialist industries were swept away by the global competition, these countries were left with huge quotas, even letting them increase carbon output. At the time of the Vatican deal Hungary was the sole EU country not to have a climate change government policy. It may sound that good that Hungary must spend the proceeds of the deal with Belgium on energy saving, but since these investments already had funding in the government’s budget proposal, the money already allocated to this cause will be spent elsewhere – matching cash-flows in budgetary proposals is not much more than a PR-trick.Dániel Antal