Greenhouse cuts to affect electricity rates, says Madrid

As Europe readies itself to cut greenhouse gases in line with EU and Kyoto obligations, the Spanish government has warned that domestic electricity prices will rise.

Environment Minister Cristina Narbona said for the first time yesterday that meeting greenhouse gas targets will affect domestic electricity prices, while vowing to limit the impact on consumers.

"Without doubt they [prices] will rise", she said presenting a preview of Madrid’s plan for allocating and trading CO2 emission quotas to companies.

Although the EU plan for emissions trading - aimed at reaching Kyoto obligations - does not include domestic consumers, the Spanish government has vowed to work on the principle of "polluter pays".

Domestic and transport sectors are thought to be responsible for around 60% of Spain’s CO2 emissions the minister said, according to Cinco Dias.

"It is not [only] industry that should act against diffuse excessive emissions", Ms Narbona said.

Spain has seen major economic growth since the Protocols were agreed and since its ‘base year’ of 1990 – against which targets are measured - making targets more difficult to reach.

Spain has vowed to decrease greenhouse gas emissions by 15% by 2012 – based on 1990 levels.

But the country has already increased emissions by 41% since 1990, according to the government’s own figures.

On 18 May, the European Commission began preparations for infringement proceedings against Spain and five other states for failing to submit the so-called "national action plans", under which they have to fix the level of emissions permitted to each of their companies.

The EU's emmission's trading scheme is scheduled to come into force early next year.