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Author Topic: The European Emissions Trading System  (Read 4665 times)

dlen

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The European Emissions Trading System
« on: October 07, 2014, 07:59:51 PM »
As I read, there are negotiations under way to reform the thing, which is good.
Whether the outcome will be sufficient, is another matter.
There is actually a british organisation, http://sandbag.org.uk, that is monitoring this development closely.
See their last newsletter here: http://www.sandbag.org.uk/newsletter/sandbag-monthly-newsletter/archive/2014/10/07/autumn-sandbag-newsletter.

My personal favorites for reform are the following points:
  • Cover 100% of emissions instead of 50.
  • Lower the cap faster.
  • Lower the influence of "Clean Development Mechanism" - emission certificates, because they are treacherous.
  • Allow exporters to sell the certificates related to their goods, and enforce importers to buy adequate emission certificates, if they did not so in their exporting country. This would make most of the current exceptions for the "export oriented" industry obsolete and would encourage non-european exporting nations to install their own certificate system, because then their government could pocket the money that would otherwise go to the European authorities.
AFAIK the biggest obstacle in the moment is Poland and the Vysegrad group of coal oriented east european countries. Of course for them some regional delay of the regulation is unavoidable.

Sandbag has a very funny and interesting approach to the problem of too many allowances existing: to buy them out by the crowd http://www.sandbag.org.uk/carbon/!!!  ;D

Also, I created an Avaaz - Petition to this subject (https://secure.avaaz.org/de/petition/Erfassung_von_100_der_KlimagasEmissionen_durch_das_Zertifikatesystem/edit/). It's more like a joke, it got 3 (in words: three) subscriptions up to now.  ;)

O.k. all kinds of epiniens welcome. What cap and what rate of decrease would be best?, e.g.

Dominik

dlen

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Re: The European Emissions Trading System
« Reply #1 on: October 12, 2014, 11:25:41 PM »
I find it very interesting, that apparently nobody in this forum seems to be interested in this topic. I wonder whether it was badly presented in the lead post or in itself not interesting, or too complex or too simple or too far away or too eurocentristic or too weird or too burocratistic or just not sexy ...

Neven

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Re: The European Emissions Trading System
« Reply #2 on: October 12, 2014, 11:48:23 PM »
I find it interesting, Dominik, but I don't have the time to investigate it. The only thing I know about the ETS is that large polluters are let off the hook.
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domen_

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Re: The European Emissions Trading System
« Reply #3 on: October 13, 2014, 01:29:30 AM »
Economic crisis has reduced EU emissions and that's why price of CO2 allowance crashed, so ETS system isn't really doing anything.

It could be made into an effective way to reduce emissions but it really needs more aggressive approach. At the moment price of CO2 allowance is about 6€/tCO2 but it should be somewhere between 20-30€ to get investments going.

Yeah, Poland is problematic. Too much coal lobbies. Many other countries also not serious about it (including my own country, Slovenia). I doubt that EU commission will be able to pass necessary reforms to get this thing going.

SATire

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Re: The European Emissions Trading System
« Reply #4 on: October 13, 2014, 06:26:22 PM »
I would like to agree with Dominiks "personal favorites" in the top post. Today, the ETS is dead - even the burning of lignite / brown coal is done 24/7 because the price for CO2 emissions collapsed due to the 2009 "crisis" and due to the success of renewables and such.

At current prices of <10 € per ton the resulting costs per person and year is e.g. 9t * 6 €/t= 54 €. This small price will not change any consumer habits. If prices would be >100€/t (~900 €/ year and person) and some other consumer taxes (e.g. VAT) would be reduced a bit, that could be the seed for some first effects. But realistically a price similar to todays petrol tax would be much more helpful (86 ct/l today in Germany - so about 1 €/kg CO2 would be appropriate) - again with a reduced VAT to compensate and to help poor poeple a bit.

There is no need to help industry if the Carbon tax/ emission certificate/ "how ever you name it" is charged at the boarder with some "carbon custom". To act appropriate the consumer must feel the price of CO2 regardles of the place it was burned. There is no need to help industry or to punish it - industry just produces what customers are asking for. And industry must do this at lowest cost possible or quit doing anything. So if you want to use the market to drive the transition efficiently, than you must put a significant price tag at CO2 and you must be sure, that no robbery can work around that anyhow/anywhere. E.g. customs could use a worst-case guessing of the CO2 footprint for all goods produced without equally expensive CO2 costs somewhere else. Satellites tracking CO2 sources will help to prevent fraud in the near future.

   

dlen

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Re: The European Emissions Trading System
« Reply #5 on: October 17, 2014, 05:56:06 PM »
In my humble opinion, the ets is - or better can become - the magic bullet, at least for Europe.

The US, India and China will certainly look very attentively to how it works, or not. And for us to make our homework will make feel developing nations better in doing something themselves. As long as we stay on the high emission levels, there is not a big chance, the developing nations will  refrain from pulling up their emissions without restrain.

I don't know much about other countries, but in Germany, the topic is hardly covered in the mass media at all, and if, with a "look it doesn't work!" attitude. I can understand Neven completely, because there is hardly any analysis explaining the matter to the broader public out there.

It just isn't sexy. It's from the European Union. It's a complicated, messed up set of regulations set up by a complicated, messed up body of legislation with very contradictive attitudes and interests. It's just a matter not made for mass media, which want catchy action, sensation, simplicity, a compelling story.

And most people feel contradictory within themselves, I suppose. E.g., if they really insulate the tenement I live in, our rent will rise considerably and the respective drop in heating cost will compensate only half of the rise, appoximately. (At current energy price. With an elevated energy price, comparison is another matter, but the absolute cost will be the same.) That means a palpable drop in present standard of living, if I don't count saving the earth.

But there is a group of inspired people out there, who set out to make the thing better. It will take time, it will mean struggle against coal and Poland.

And if successful, it will really work. And we can scap every other subsidy, tax, regulation and so forth about GHGs.


crandles

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Re: The European Emissions Trading System
« Reply #6 on: October 17, 2014, 06:05:51 PM »
paper just out
http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2014/06/Working-Paper-159-Dietz-and-Stern-20141.pdf

suggests

Quote
As a guide, we find that these models suggest
the carbon price in a setting of globally coordinated policy, such as a cap-and trade
regime or a system of harmonised domestic carbon taxes, should be in
the range $32-103/tCO2 (2012 prices) in 2015. It must be remembered that
the DICE model lacks adjustment costs, so the high end of the range should be
interpreted cautiously. On the other hand and potentially of great importance,
we have, notwithstanding our extensions, omitted important risks in relation to
the distribution of damages, which could give higher carbon prices. Within two
decades the carbon price should rise in real terms to $82-260/tCO2. Doing so
would, according to the model, keep the expected atmospheric stock of carbon
dioxide to a maximum of c. 425-500ppm and the expected increase in global
mean temperature to c. 1.5-2degC above pre-industrial.

Laurent

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Re: The European Emissions Trading System
« Reply #7 on: October 21, 2014, 08:44:06 PM »

dlen

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Re: The European Emissions Trading System
« Reply #8 on: October 27, 2014, 10:13:52 PM »
Thanks Laurent, very informative.
Concerning Poland, the aspect of will to be as independent from Russia as possible didn't come to my mind, the info of France blocking power lines to the iberic peninsula was completely unknown to me.
OTH there was no mentioning of the ETS in the article.

From http://www.sandbag.org.uk/home/:

Quote
To address this growing (allowances, dlen) surplus, the UK has proposed some of the most aggressive reforms to the Market Stability Reserve legislation yet published by any EU member state. The government argues that the mechanism proposed by the Commission needs to be improved by starting earlier (in 2017 rather than 2021) and by withholding or even cancelling hundreds of millions of allowances due to flood the oversupplied market in 2019 and 2020. In addition, it has proposed further safeguards to prevent allowances removed from flowing back into the market too readily.

Actually, the UK d i d slash quite a bit of their internal allowances already. Bravo, UK, in this case!


dlen

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Re: The European Emissions Trading System
« Reply #9 on: October 28, 2014, 11:32:10 PM »
New messages from here:

http://www.theguardian.com/world/2014/oct/24/eu-leaders-agree-to-cut-greenhouse-gas-emissions-by-40-by-2030?CMP=share_btn_tw

It seems as if the above formulated thought of including the missing sectors of emissions is only logical, so that it will improve the ETS:

Quote
Danish concerns were addressed with the introduction of a “cap and trade approach” to sectors previously considered outside the bloc’s carbon market such as agriculture, buildings and transport – which alone represents 31% of the bloc’s emissions.

As you can read here, the polish question has found a - though heavily disputed - solution.

Quote
Poland, heavily dependent on coal-fired energy production, threatened to block the deal unless the costs to its economy and industry were discounted by €15bn-€20bn (£12bn-£16bn) between 2020 and 2030, under a complicated system of concessions from the EU’s carbon trading system.

They will get a considerable amount of free allowances. Far from perfect, but, as the saying goes: He who wants everything wants nothing.

Anyway, good news.

viddaloo

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Re: The European Emissions Trading System
« Reply #10 on: November 03, 2014, 09:40:05 AM »
I just read [in Norwegian] that EU 10 days ago decided to quit using CO₂ quotas from 2020. Comments/confirmation?
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