European Emissions Trading is Failing

[Keepitsimple]

Here's a report published today about the failure of European Emissions Trading - the centerpiece of Kyoto's Global approach to curbing Greenhouse Gases. In Canada, we hear almost exclusively about targets - and our seeming inability to achieve them. Well, there's more to Kyoto than just targets. This article might give people some insight into why Canada is reluctant to belly-up to Kyoto. Here's some excerpts:

Despite the fanfare at its launch, it seems the EU emissions trading scheme will ultimately fail to deliver in its current form. An over-allocation of emissions credits in the first phase continues to subdue the price of carbon below levels necessary to promote genuine investment in carbon abatement. Moreover, a lack of policy cohesion is undermining attempts to get phase two back on track.

The second phase of emissions trading begins in January 2008 and ends in 2012 - by which time Europe is committed under the Kyoto Protocol to cut overall carbon emissions by 8% on 1990 levels. In recent weeks, the European Commission rejected nine of the 10 NAPs it had received for phase two, slashing allocations in the process. The storm of protests this provoked from member states does not augur well for the future of the EU ETS. Describing cuts to Germany's second phase NAP as "totally unacceptable," economy minister Michael Glos and his compatriots will be lobbying hard to exempt new coal-fired plant builds from emissions curbs - a move that would threaten the integrity of the entire scheme.

Even at their peak in April 2006, when EU emission allowance prices hit the E30 per metric tonne mark, it was still more profitable for power generators to burn coal as opposed to gas. The price of carbon for 2007, the final year of the first phase, is currently nearer E8 per metric tonne. The impact of rising gas prices has been keenest felt in the UK, where coal has overtaken natural gas as the key input fuel for power generation. Britain was subsequently the furthest from meeting its allocation in the first full year of emissions trading.

Kyoto targets under threat

Europe finds itself in a position of extreme responsibility. A failed European venture would severely hamper any post-Kyoto attempt to create a global emissions trading scheme. Of the 36 Annex B countries that have agreed to fixed emission targets under the Protocol, 31 are European states. Should the scheme limp on in its current form, focus will begin to shift back to national policy instruments.

While environmentally proactive member states such as the UK, Sweden and Germany will continue to lead the debate, not everyone will necessarily follow. Climate change is a global issue that requires a cohesive, multi-lateral response.

Ultimately, should Europe fail to make a success of emissions trading, the EU will miss its Kyoto targets and global carbon emissions will continue to rise unchecked.

Link: http://www.energy-business-review.com/arti...B5-D66CC822232A

[speaker]

In related news this site talks about the need to conserve energy and become more efficient. Carbon trading was intended to be an option of last resort in countries or companies that either don't want to or can't meet their national goals through any of the other options. It's only when trading is perceived as the easy option that all the associated problems with not taking responsibility in the first place crop up.

http://ec.europa.eu/energy/demand/index_en.htm

This reference is to comments from the EU environment minister about how few countries are stepping up to the table. She points out that it is basically a lack of will power rather than options for achieving the goals.

http://www.guardian.co.uk/climatechange/st...1098635,00.html

[Keepitsimple]

My point to this topic is that the Europeans didn't get it right on this first Kyoto go-around. It doesn't really matter why - there's plenty of reasons. Canada has pledged to go forward and reduce emissions by 20% by 2020 and they have pledged to be an active participant - in fact a leader, in negotiations for post 2012 Kyoto.