|
Amendments to the EU emissions trading scheme (EU ETS) proposed by the European Commission are a big step forward and should be adopted into EU legislation by the spring of 2009. This, says a report published today by the Carbon Trust, would increase the chances of securing a worldwide climate deal and boost business and investor confidence.
The report, “Cutting carbon in Europe: the 2020 package and outlook for the EU ETS”, analyses the climate change package proposed by the European Commission earlier this year and its implications for business. It concludes that the proposals are a bold and significant step in the right direction that correct weaknesses in the current scheme and provide the level of certainty that business and investors have been calling for. In order to increase the chances of reaching a global climate deal in Copenhagen in December 2009, the amendments to the EU ETS should now be adopted before the European Parliament’s recess in spring 2009.
Michael Grubb, chief economist at The Carbon Trust said:
“It’s an intelligent, well-crafted package of proposals. The ability of the EU to adopt these into legislation quickly is critical in maintaining the momentum for a global climate change deal. By making this commitment as early as possible, the EU has the opportunity to send a strong signal to the new US administration and have a powerful impact on the actions of the global community at Copenhagen. Businesses and investors can also begin to act in the knowledge that they will be operating in a carbon-constrained future.” Although the report argues for the swift adoption of the European Commission’s proposals, balancing business competitiveness with the need to reduce carbon will continue to challenge the EU as it seeks to iron out implementation issues. Such issues identified in the report include:
- Deciding which activities might qualify for continuing free allocation of permits;
- Managing the problem of carbon leakage (where businesses consider moving operations outside the EU in order to operate without restrictions on emissions); and
- Uncertainty regarding the price of carbon.
A copy of the report can be accessed here. The Carbon Trust has published a number of publications on the EU ETS:
- 2008 – EU ETS impacts on profitability and trade: a sector by sector analysis
- 2007 - EU ETS phase II allocation: implications and lessons
- 2006 - Allocation and competitiveness in the EU emissions trading system - options for Phase II and beyond
- 2004 - The European emission trading scheme: implications for industrial competitiveness
-ENDS-
Notes to editors
The Carbon Trust
- The Carbon Trust is an independent company set up by government in response to the threat of climate change, to accelerate the move to a low carbon economy by working with organisations to reduce carbon emissions and develop commercial low carbon technologies. The Carbon Trust works with UK business and the public sector through its work in five complementary areas: insights, solutions, innovations, enterprises and investments. Together these help to explain, deliver, develop, create and finance low carbon enterprise.
- The Carbon Trust is funded by the Department for Environment, Food and Rural Affairs (Defra), the Department for Business, Enterprise and Regulatory Reform (BERR), the Scottish Government, the Welsh Assembly Government and Invest Northern Ireland.
- For more information on the Carbon Trust visit http://www.carbontrust.co.uk/ or call the Carbon Trust Advice Line on 0800 085 2005.
|