EU needs to remove 1.7bn carbon credits
The British government is backing an environmentalist group that claimed Wednesday the EU Emissions Trading System is operating with a 1.9bn tonne oversupply of carbon permits, undermining a shift to low-carbon technologies.
Publishing its research report "Buckle Up! Tighten the Cap and Avoid the Carbon Crash," Sandbag Climate Campaign called for 1.7bn permits to be removed from the system to get Europe's flagship policy back on track.
The research findings were endorsed by the UK government, with Energy and Climate Change Secretary Chris Huhne speaking at the report's launch.
"[...] While the problem of oversupply has become more serious, the proposed solutions have become more feeble, with the EU Commission proposing a 'set-aside' of permits of 1.4bn, then 500m-800m, and most recently no proposed figure at all," the report suggested.
The 'set-aside' proposal is already included in the EU's low-carbon 2050 road map but the tool, which could curb supply, has yet to be embraced by member states.
Huhne said he will urge Europe to stand firm on its climate ambitions, as oversupply will threaten the UK's own carbon budget.
Sandbag is concerned that the excessive supply of permits, which it said will likely reach 1.9bn tonnes by 2020, will continue to depress carbon prices and delay vital low-carbon investment, resulting in a failure to halt Europe's growing carbon emissions and hit targets.
The report calls for reopening of the ETS Directive by 2015 to adjust the future cap in the ETS and permanently cancel the set aside as well as create an ongoing cancellation mechanism to account for oversupply.
Sandbag is also pushing for the introduction of a reserve price for auctioned permits and to keep the use of international offsets limited in volumes and type. JT
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24 May 2012 21:02
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EDEM,ESGM
24 May 2012 21:02
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EDEM,ESGM
