“Some NGOs, amongst them the Swedish arm of Friends of the Earth, have signed a petition to scrap the EU Emissions Trading Scheme. That would be strengthening the fossil fuel lobby and get us even further away from achieving the two degree target”, says Susanne Häfeli-Hestvik, Managing Director Tricorona Climate Partner.
Here are some numbers: Initially the reduction goal from 2008-2020 for the EU ETS sectors was 5.0 Gt cumulated, out of which 1.65 Gt could be fulfilled with international offsets. The 2010 Energy Efficiency Directive and other policy measures reduced the demand by about 2.5 Gt and economic downturn has taken out another 1 Gt from 2008-2011 alone, so that there is hardly any demand left at all, which has sent the prices downhill. The problem is more one of perception in that the politicians never really agreed on whether they wanted the emissions trading scheme to reduce emissions (which it has done and at lower costs than expected) or to send a price signal leading to renewable energy investments and fuel switch (which has not happened anymore since other policies have taken on that role).
“We need every policy possible if we want to win this race against time” says Häfeli-Hestvik. “Not ‘free market’ logic is the problem but the enormous lobbying budget the fossil fuel industry and those having a stake in the status quo dispose of. An emission trading scheme is not a miracle pill; it is a very efficient instrument alongside a wide array of other measures to include the costs related to the negative environmental externalities into our production and consumption. Important is now to use the system more efficiently i.e. to tighten the caps, close loopholes and windfall profits and to channel the auctioning revenues into real emission reducing measures, both within and outside Europe given that the marginal abatement cost is much lower in developing countries. I am thus a big fan of internal compensation like we see it in some municipalities and landsting and an even bigger fan of funding renewable energy and clean technology investments in developing countries, where we can achieve much more emission reductions with the same amount of money”.
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