European Commission president José Manuel Barroso has said sharing the burden of CO2 emissions cuts between states based on relative wealth was the fairest way to do it.
He also predicted yesterday that EU states would negotiate very few changes to the commission's climate change proposal, which he described as a "historic decision".
"Responding to the challenge of climate change is the ultimate political test for our generation," said Mr Barroso.
"Our package not only responds to this challenge, but holds the right answer to the challenge of energy security and is an opportunity that should create thousands of new businesses and millions of jobs."
He confirmed several European leaders had lobbied him in the run-up to the publication of the package but said he felt that all EU states would agree to support the proposal.
Under the plan, Ireland will be forced to cut CO2 emissions by 20 per cent before 2020, compared to its emissions in 2005. The Government will also have to ensure that 16 per cent of its total energy use comes from renewable energy sources by this date.
Taoiseach Bertie Ahern has written to Mr Barroso arguing that allocating Ireland among the highest cuts in CO2 because of its high gross domestic product (GDP) is unfair. Mr Ahern said using gross national product (GNP) - which strips out the repatriated profits of multinationals based in Ireland - would be a better representation of wealth.
Other factors that need to be taken into consideration are Ireland's infrastructural deficit, our recent and projected levels of population growth and the relatively large size of Irish agriculture and its global competitiveness, according to the letter sent to Mr Barroso.
The Government is expected to make this point when the proposal is discussed at the Council of Ministers in Brussels later this year, when amendments are still possible.
The European Parliament will also get the chance to debate and amend the climate change proposal, which the commission wants to pass into law this year or early next year.
Mr Barroso staunchly defended the package in Brussels yesterday and the methodology chosen to allocate individual targets to member states.
He said sharing the burden based on GDP was "the fairest way to do it" and he did not envisage big changes to the proposal. "The final result in council will be, if not exactly what we have proposed, very, very close to it," he said, stressing the extensive consultation with states in the last few weeks.
He also noted that some EU states were complaining to Brussels about the proposed emissions and renewable targets, while actually setting tougher national targets for themselves.
Mr Barroso also shrugged off concerns from environmental non-governmental organisations (NGOs) that last-minute changes to the package to introduce a special compensation regime for energy intensive industries would hurt the environment.
Climate and energy strategy: main points
• Sets targets for reducing greenhouse gases and increasing the use of renewable energy. It puts into practice the EU's commitments made at the UN conference in Bali: to cut EU CO2 emissions by 20 per cent by 2020, compared to 1990 levels, and boost the use of renewable energy to account for 20 per cent of total energy.
• Each EU state gets different targets based on its relative wealth. Ireland gets the highest possible target for cutting CO2 emissions - 20 per cent by 2020, compared to 2005. Heavy industry is covered by the emissions trading scheme. It must cut emissions by 21 per cent by 2020. Ireland must ensure green energy accounts for 16 per cent of total energy use by 2020. Green energy currently accounts for 2.7 per cent.
• The cost of meeting the targets is estimated at about 0.5 per cent of GDP per year, which could cost Ireland almost €1 billion annually. But the commission argues that not taking action would probably cost much more, possibly between 5 to 20 per cent of GDP because of higher oil prices and the consequences of climate change.
It says reducing the EU's dependence on oil and gas will also increase its energy security.
• Ireland has told the commission that targets based on GDP are too severe because this takes into account the repatriated profits from the multinational sector. It wants the commission to set targets based on gross national income, which could reduce the bill to about €800 million per year. The commission says consumers will face just a 5 per cent increase in bills by 2020 due to the plan, costing an extra €150 per year.
• Member states will face tighter restrictions on the use of so called flexible mechanisms and carbon credits to meet their emissions reductions targets. Under the Kyoto Protocol states such as Ireland were allowed more scope to invest in green energy projects abroad to offset higher CO2 emissions at home.
• The plan also allows additional State aid to be invested in renewables and gives a financial boost to research in new technology for "carbon capture and storage", which would see CO2 emitted by industry being pumped into disused oil and gas fields.