"As Hungary is a small country, some say that we won't have an effect on global emissions. But Hungary's per capita emissions are nearly 1.5 times the world average, and we have a responsibility to reduce emissions," Zoltan Szabo of the Clean Air Action Group told hvg.hu. He remarked: “Some government measures don't take environmental concerns into account."

While Hungarian per capita energy use and emissions are still lower than that of the older EU member states, officials of the Ministry of Environment and Water agree that more emphasis should be put on the issue of climate change for its mid- and long run implications, before it was too late.

Globally, atmospheric concentrations of carbon dioxide are constantly increasing and temperatures have risen by about 0.6 degrees Celsius just this century. According to Real Climate, an online forum of climate scientists, if such patterns continue, there is a risk of rising sea levels, melting glaciers, and increased frequency and intensity of severe weather events such as floods and hurricanes. The UN endorsed Intergovernmental Panel on Climate Change warns that in order to stabilize this trend, CO2 emissions should be cut by 60 percent across the world by 2050.

In Hungary, primarily due to the collapse of major industrial enterprises during the economic transition of the ‘90s, CO2 emissions by 2002 have been cut as much as by 29 percent compared to year 1990, significantly exceeding the agreed 6 percent reduction set by the 1997 Kyoto Protocol.

Hungary – joining the EU - also became a participant in the European Union's Emission Trading System. In this system, each country receives a certain number of permits to emit CO2 based on an EU approved national quota. Each country distributes these permits to companies who can trade them, domestically and abroad, to meet the necessary quota. Businesses with low emissions can sell their permits, while those who exceed the required limit must buy permits or be punished with fines. The goal is that businesses will be motivated by economic incentives to become more energy efficient. This program was launched for a 2005-2007 period, and will continue for a second period between 2008 and 2012

In 2005, Hungary allocated permits for 29 million tons of carbon to distribute among 170 companies and their 240 facilities. Hungarian businesses were able to remain within the required limit and benefited from selling excess permits to other EU nations in this profitable market.

According to many environmentalists, including Peter Kardos of the Energy Club, however, those targets were too easily reached because the set quota was too lenient. As a result, most companies were not forced to make significant changes in their manufacturing processes. "In the second (2008-2012) period stricter quotas could make a difference," said Kardos.

A more restrictive quota policy can be expected for the next phase of the program, when the EU also plans to regulate other greenhouse gases, Szabo said. He emphasized that in order to avoid nations asking for more permits than necessary, the EU has to have more oversight and influence.

The National Allocation Plan, which decides how many permits Hungary will ask for in the 2008-2012 period, is under development but still needs approval from other ministries and the EU. According to an official from the Ministry of Environmental and Water official, the ministry hopes to allocate only as many permits as a business would need if it were using the best technology available. In this way, businesses would be forced to make changes in their pollution practices.

Most Hungarian environmentalists say that further action needs to be taken to complement the permit system, which excludes regulation of transportation and household emissions. The Clean Air Action Group and other NGOs are pushing for a two prong approach, first increasing energy efficiency and lowering energy demand, and then shifting to renewable energy sources such as solar, geothermal and biomass.

According to Szabo, increasing energy efficiency includes starting at the construction level. Contractors need to ensure "greener" buildings and more compact cities that won't require further expansion of energy intensive systems such as highways and sewage, he said. "We have to make it clear to the public that lower energy use is important," Szabo said. "In our national development plan we have to include these interests."

In an effort to increase access to renewable energy, this year the government allocated 183 million forint for subsidized household solar panels, but this amount was spent on willing consumers in just 11 days, according to Kardos.

"Public interest and desire to outfit homes with renewable energy is therefore huge," he said.

Deputy Secretary of Environment and Water Conservation, Kálmán Kovács recently said that the ministry has pledged 40 to 50 billion forint from the National Development Plan’s 2007-2013 EU funds for the adoption of renewable resources, with an emphasis on geothermal and bio-energy. A ministry official said the amount could increase if some funds from permit auctions are redirected to this cause. The minstry is aiming to produce 10 percent of the country’s energy from renewable sources by 2013.

Some environmentalists and economists are also suggesting the implementation of a carbon tax to complement the permit system. With the consequent higher energy prices, businesses and households could both consider environmental impacts when making longer term, taking longer term decisions such as car purchases and building insulation. By including environmental costs in market prices, environmentalists argue, the economy can both grow and be environmentally sustainable in the long run.

Carbon tax is also discussed in the international arena. As quoted by Martin Wolf in the Financial Times, economist William Nordhaus contends that such a carbon tax would eliminate arbitrary quotas for carbon emissions, standardize and set the price of carbon, and provide revenues for countries. However, in Hungary an environmental ministry offical pointed out that while a carbon tax might reduce the emissions in some sectors, its effect on gas and other energy prices could be “politically sensitive”.

To address the longer term problem, the Ministry of Environmental and Water administrators have recently started preparing a comprehensive climate change strategy to address the need for drastic emission cuts and the creation of a renewable energy market. The challenge is to strike a balance between national development, economic competitiveness, and environmental considerations. There is often strong resistance to such policy decisions from such other departments as the Ministry of Economy. Officials there are quick to defend the short term business interest of companies, said an unnamed environmental ministry official. “It’s a clash between two value systems,” the official said. “Sometimes those protecting business interests are unable to perceive that if companies are more efficient regarding carbon emissions that entails more efficiency in other areas as well.”

The question remains whether or not a carbon tax, tougher permit system or a combination of the two is enough for long term emission reductions. In the meantime, environmentalists say that increased public awareness and responsibility, complemented by improved efficiency and renewable energy use, is crucial for a sustainable Earth in the future. Hungary must participate in this global effort.

Julia Szinai (Berkley, California)