Reformed Carbon Scheme Could Drive Global Change, Says Report
Trading scheme designed to cut Europe's carbon dioxide emissions by setting limits for big polluters
Hopes of a global deal on climate change would be raised by early adoption of the European commission's tough reforms of the region's carbon trading regime, according to a report out today.
The Carbon Trust, the company set up to help business curb carbon emissions and develop new, low carbon technologies, said the reforms of the emissions trading scheme (ETS) were a "big, bold stride in the right direction".
It wants the reforms adopted by next spring in order to boost the chances of reaching a global climate change deal at the international climate conference in Copenhagen in December next year.
The ETS is designed to cut Europe's carbon dioxide emissions by setting limits for big polluters such as power generators and steel makers. Companies with emissions below set levels can sell the unused allocation while over polluters must buy permits to cover the excess or face financial penalties.
Under the commission's proposals, the scope of the scheme will be stretched to include other sectors, greater harmonization of rules between member states and an increase in the number of permits which will be auctioned rather than handed out for nothing.
Michael Grubb, the Carbon Trust's chief economist, said: "It's an intelligent, well crafted package of proposals. The ability of the EU to adopt these into legislation quickly is critical in maintaining momentum for a global climate change deal.
"By making this commitment as early as possible, the EU has the opportunity to send a strong signal to the new US administration and have a powerful impact on the actions of the global community at Copenhagen."
Some critics say the measures could make EU companies uncompetitive as the price of carbon permits increases, forcing businesses to move elsewhere.
The report acknowledges there are problems which need to be settled, including which sectors should get free permits and companies migrating because of the impact of the ETS. It argues that the new measures provide the level of certainty that companies and investors seek.
The Carbon Trust's backing for the new-look ETS comes as China is looking at its own "cap and trade" scheme.
The Carbon Trust, the company set up to help business curb carbon emissions and develop new, low carbon technologies, said the reforms of the emissions trading scheme (ETS) were a "big, bold stride in the right direction".
It wants the reforms adopted by next spring in order to boost the chances of reaching a global climate change deal at the international climate conference in Copenhagen in December next year.
The ETS is designed to cut Europe's carbon dioxide emissions by setting limits for big polluters such as power generators and steel makers. Companies with emissions below set levels can sell the unused allocation while over polluters must buy permits to cover the excess or face financial penalties.
Under the commission's proposals, the scope of the scheme will be stretched to include other sectors, greater harmonization of rules between member states and an increase in the number of permits which will be auctioned rather than handed out for nothing.
Michael Grubb, the Carbon Trust's chief economist, said: "It's an intelligent, well crafted package of proposals. The ability of the EU to adopt these into legislation quickly is critical in maintaining momentum for a global climate change deal.
"By making this commitment as early as possible, the EU has the opportunity to send a strong signal to the new US administration and have a powerful impact on the actions of the global community at Copenhagen."
Some critics say the measures could make EU companies uncompetitive as the price of carbon permits increases, forcing businesses to move elsewhere.
The report acknowledges there are problems which need to be settled, including which sectors should get free permits and companies migrating because of the impact of the ETS. It argues that the new measures provide the level of certainty that companies and investors seek.
The Carbon Trust's backing for the new-look ETS comes as China is looking at its own "cap and trade" scheme.
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