Dublin MEP Nessa Childers gave a cautious welcome to today’s vote, in the Environment Committee of the European Parliament, to address serious problems with the EU’s emissions trading scheme, where chronically low prices have failed to spur low-carbon investments and a reduction in the release of climate changing gases to the atmosphere.
Speaking from Brussels after taking part in the vote, Ms. Childers said:
“The EU set up an emissions trading scheme to put a price on greenhouse gas releases and thus incentivise business investment in environmentally friendly technology.
“However, this market is awash with emissions allowances to such an extent that the price is insignificant and the scheme is unable to deliver on its purpose.
“That’s why we must take an over surplus to the tune of two billion emission allowances out of the market and put in in a stability reserve pool.
“We’d like to see this done as early as 2017, to tackle the glut much earlier than the Commission’s proposed deadline of 2021. However, the only way to get this through at the committee today was to concede a late 2018 time limit to conservatives.
“We will also have to negotiate the outcome with the EU Member State’s governments. We need progress ahead of the global climate talks that will take place in Paris late this year.
“There are 900 million outstanding allowances that are due for auctioning in 5 years which must not find their way into the market if we are to prevent already depressed prices from going down even further.
“The same goes for more than 600 million unallocated allowances that the industry and energy sectors have no need for, or that were intended for possible new producers.
“If you look at the price levels that we need to change the incentives, this is a pretty modest attempt to stem another tide of oversupply. Parliament event included a special fund of 300 million allowances to support industrial innovation.
“The survival of this scheme now hinges on Member State governments recognising as much.”