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Saving emissions trading from irrelevance

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Allowances under the European Emissions Trading System are trading at less than €8 per tonne of carbon dioxide. This is far too low to stimulate increased investment in energy efficiency or low carbon energy. The system must be overhauled so that it provides higher prices and greater stability.

As a first step, the cap on the volume of emissions should be lowered, to reflect the fact that the economic recession has led to lower emission levels than expected when the cap was set. A lower cap should be combined with a price floor and a price ceiling.

Without safeguards, an effective emissions trading system would lead to more manufacturing in countries with cheap energy and no carbon price. Therefore, the EU should  introduce border tax adjustments, with revenue returned to the country of origin for spending on energy efficiency and low carbon energy.

The Centre for European Reform has now published my paper on this. (see Centre For European Reform: Saving emissions trading from irrelevance).

by Stephen Tindale

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Climate Answers
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Climate change is the most serious issue ever to have faced humanity. Rightly, it is now high on the public, political, media and business agendas. However, too much of the discussion is still about what we should not be doing or what we should be against. There is not enough discussion or information on solutions - what we can and should do to minimise dangerous climate change, and what should be done to make us not only safer and more secure, but also richer and happier.

Stephen Tindale photoStephen Tindale (29 March 1963 – 1 July 2017) was a British environmentalist who was Executive Director of Greenpeace UK from 2000 to 2005. He was Director of The Alvin Weinberg Foundation, co-founder of the organisation Climate Answers, Associate Fellow at the Centre for European Reform and co-author of Repowering Communities with Prashant Vaze.