A permanent reform to raise prices on the European Union's ailing carbon market would pose legal challenges, said European Commissioner for Energy Guenther Oettinger, raising a skeptical note about efforts to inject new life in the bloc's flagship program to fight climate change.
A permanent reform to raise prices on the European Union's ailing carbon
market would pose legal challenges, said European Commissioner for Energy
Guenther Oettinger, raising a skeptical note about efforts to inject new life
in the bloc's flagship program to fight climate change.
Mr. Oettinger's comments come just before an influential committee of the
European Parliament will hold a crucial vote for the future of the Emissions
Trading System, which has lost effectiveness because of low prices. The
environment committee will vote on Tuesday on whether to support a proposal
aimed at boosting CO2 prices in the short term. Earlier this year, a
non-binding vote against the plan in another committee sent prices to their
lowest level in years.
The ETS is
Europe
's main instrument to reduce
greenhouse gas emissions and the EU has been promoting it worldwide as the most
efficient way to do so, seeking to engage other nations to build similar plans.
A demise of the system would be a big blow for
Europe
's climate
ambitions, and the continent would have to redesign its policy from scratch.
The European Commission--the EU's executive body--has proposed temporary
measures but is also trying to hammer out a reform to permanently eliminate the
oversupply. But Mr. Oettinger said in an interview that the latter may run into
legal obstacles.
Last year, the commission floated six different options to permanently reduce
the oversupply, such as canceling CO2 permits, including other industries in
the market to increase demand, or even a mechanism to directly manage the
prices, which experts say could resemble the way central banks manage
currencies. Changes like this would require the approval of other EU
governments and the EU parliament, which would take some time.
"I am not sure what is feasible in a legal manner, because it is an
existing scheme so many stakeholders are engaged, have invested and so to
change on the way to 2020 is a really sensitive issue," Mr. Oettinger
said.
The ETS was created in 2005 with the aim of putting a price on permits to emit
CO2 by capping their numbers and encouraging their trade. Companies would have
preferred to invest in clean technologies to permanently lower their greenhouse
gas emissions, rather than pay for permits. The higher the price, the stronger
the incentive. But the recent economic crisis cut industrial production,
consequently reducing CO2 emissions and the need to buy permits. This, combined
with an oversupply dating from the ETS early days, has depressed prices to
under three euros, a level at which the cost of CO2 becomes irrelevant for
investment decisions.
Mr. Oettinger said that the carbon market is "vital" and he supports
the proposed short-term measures, even though he doesn't think they will drive
prices up enough to encourage expensive investments in clean energy, such as
the so-called carbon capture and storage--a technology that traps CO2 as it is
produced in power plants or industrial installations and then stored
underground.
"In 2010, 2011 we had a price level of normally 14 to 18 euros, maybe the
price will come back to this level, but not to the level which will be needed
for private investment in CCS," Mr. Oettinger said, adding that public
funding to support such projects will then be needed.
Experts say that CO2 permits would have to cost almost 40 euros to make CCS
economically viable.
Mr. Oettinger also said that the carbon market should have a role in the EU's
long term climate policy. The bloc is now starting discussions on how to shape
that policy after 2020, the year by which it has set binding CO2 emissions
targets.
Διαβάστε ακόμα
Τρι, 24 Σεπτεμβρίου 2024 - 19:58
Τρι, 24 Σεπτεμβρίου 2024 - 19:54
Τετ, 18 Σεπτεμβρίου 2024 - 18:32
Τετ, 18 Σεπτεμβρίου 2024 - 18:27
Τρι, 17 Σεπτεμβρίου 2024 - 20:01