Labour's head of delegation at the European Parliament Louis Grech has come up with an innovative idea on how the EU should tackle climate change, but he is likely to be rebuffed by MEPs from other member states.

Proposing an amendment to the EU's 2009 budget, to be voted upon tomorrow during a meeting of the Budgets Committee of the EP, Mr Grech is suggesting that the EU creates a specific fund to be able to pump millions of euros every year into climate change measures.

"With the exception of a few initiatives and programmes the EU budget does not have a clear integrated strategy to address climate issues," Mr Grech told The Sunday Times yesterday. "I am arguing that we should create a specific Climate Change Fund or a specifically dedicated budget line to improve the EU's capability to address climate change issues from a budgetary and financial perspective."

Mr Grech, who last year handled the EU budget following his appointment as rapporteur on the 2008 budget, is suggesting that the money to this new fund should come from the EU's Emissions Trading Scheme (ETS) - which makes companies all over the EU pay for emitting greenhouse gasses.

In his recommendation, Mr Grech said that the ETS is estimated to generate billions of euros annually which can be dedicated to this fund.

"Cross-border pollution is best managed at supranational level, especially when it comes to allocation of resources and support," he said.

Although it is almost impossible to find how much money is needed by the EU to tackle climate change issues, some recent studies estimate that the bloc's share in the cost of implementing climate change would not be less than €60 billion.

Despite being described as a positive suggestion, Mr Grech's initiative was greeted with scepticism. A number of EP observers told The Sunday Times that Mr Grech's suggestion is not expected to win the support of EU member states as money generated by the ETS usually goes directly into their pockets and not to the EU budget.

"It's definitely a positive suggestion but I'm afraid that it will not be acceptable to member states," a French MEP said.

"The suggestion involves the relocation of millions, if not billions, of euros from member states' coffers to the EU. That makes it highly unrealistic," he said.