Trading in the EU
Climate Change Strategy.
Rob Bradley, Climate Network Europe
is Climate Network Europe?
We focus on climate change
than 300 members of the Climate Action Network (CAN)
a major player at Kyoto
EU as the home of emission trading?
set the rules, but domestic trading is VERY different from Kyoto trading.
consider emissions trading?
Sets a CAP on total emission from the sectors covered
of environmental outcome
helps allocate effort between countries, increasing equity
reduce costs, making deeper cuts more politically acceptable
innovation pushes further than best available techniques
emission trading is not the same as Kyoto emission trading!
Kyoto trading incorporates hot air due to silly target-setting
Compliance is essential to a credible trading system we have the
EU trading will be for companies easier to prosecute
Few international equity issues
the Commission proposal
Downstream trading system
Sectors limited to large point sources (industrial)
Chemical sector partly excluded
has happened to it?
Proposal was blocked in interservice consultation
Blockers were DG ENTR, Germany Ministry of Economics and BDI
Proposal to reappear before COP7
Part of overall implementation package
issues for NGOs
Mandatory or voluntary?
covered and targets
Industry arguing for voluntary system
Pilot phase 2005-7 ?
Would a voluntary system have buyers?
What other policies would then be necessary?
What kind of voluntary? Companies? Sectors? Countries?
to be covered
Commission envisages just key industry sectors large point sources
Just CO2, perhaps other gases later
Chemical sector direct CO2 emissions out
Possible that countries could opt in other sectors, but still unclear
€50 per tonne CO2 over-emission
less important than the fact that it makes non-compliance stupid
Vital therefore that ET applies to companies directly
Penalty must be automatic
Proposed Directive strong on this
Auctioning vs. Grandfathering
Hybrids are possible
Principle of reward for early action/ penalty for late
Methodology to be decided at EU or member state level?
Not critical for environmental outcome
Current proposal does not include project mechanisms
Industry very strongly advocates inclusion
NGOs demand higher environmental standards than under the Kyoto Protocol
now for NGOs?
Awareness raising on ET and its key characteristics
Need to define crunch issues that could devalue ET
a feel for trade-offs with other policies and measures, e.g. taxes
Climate Network Europe's policy papers