A committee of MEPs has taken the first crucial step to repair the EU’s broken emissions trading scheme (ETS) by withholding 900 million carbon credits from auction until a later date. Unfortunately, lawmakers put off drafting the necessary legislation, and the next step for the plan is up for debate in the coming week.
The proposal to temporarily remove surplus carbon credits has been welcomed by environmental NGOs. In the words of Damien Morris, from the campaign group Sandbag: “Today’s vote is a promising first signal that policymakers recognise the current threats to the EU ETS and are prepared to salvage it, along with the EU’s international reputation for leadership on climate change,”
Market experts, however, are resolute that more fundamental, sweeping reforms are necessary in order for the ETS to stimulate low carbon investment. The current proposal is seen to delay rather than fix the over-capacity problem in the flooded market. NGOs are calling for excess allowances to be scrapped completely, while energy giant E.ON has recommended the introduction of a carbon floor and ceiling price.
“Backloading is a necessary Step One, but it’s too little, too late unless it’s embedded in a more realistic reform,” said Johannes Teyssen, chief executive of E.ON.
According to Sam Van den plas, the EU climate policy officer for WWF, “Today the ailing EU carbon market was given emergency treatment, but full recovery will require proper surgery. Backloading of emission allowances is only a temporary first step. Structural reforms of the carbon market need to make a reality of the EU’s 30 percent domestic carbon emission reduction commitments.”
More on the EU’s action to save the ETS can be found in the joint statement issued by CAN Europe, Greenpeace, and WWF on February 19th.
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About the AuthorKarl Burkart is the Digital Communications Director for the GCCA, the Global Call for Climate Action, and TckTckTck, a network of 400+ diverse organizations working around the world for greater action on the growing problem of climate change. Karl also blogs on technology and the environment for a variety of publications. You can follow him on Twitter @greendig.
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