EU's Dimas Challenges States on Emissions Plans
Date: 10-Nov-06
Country: BELGIUM
Author: Jeff Mason
Environment Commissioner Stavros Dimas said the EU executive would kick off a review soon that could simplify the scheme and expand it to include sectors such as aviation, which he said could join the existing system around 2010.
Countries' allocation plans for 2008-2012, the second phase of the trading scheme, form the basis of the system by setting limits on the amount of carbon dioxide (CO2) factories can release, forcing firms to buy emissions permits if they exceed their cap.
Dimas chided EU heads of state and government for talking publicly about the importance of fighting climate change but submitting emissions trading plans that were weak.
"The national allocation plans do not follow what the leaders ... tell us," he said.
Dimas is under pressure to prove the scheme is a reliable way to fight global warming and meet Kyoto Protocol targets after 2005 data showed EU governments had allocated more pollution permits to industry than it actually needed, leading to a crash in carbon prices.
"I am not going to let the emissions trading system suffer," Dimas said. "The second-phase national allocation plans will be the yardstick by which member states' commitment to fighting climate change will be judged."
Carbon traders are eagerly awaiting decisions on the 2008-12 plans to see how robust the market is likely to be in the next trading period. Dimas said the wait would end on Nov. 29.
"(The date is) the 29th for some," Dimas told reporters when asked when the decisions on some of the plans would be announced.
SUPPORT FROM ECONOMISTS
Britain's government-funded Carbon Trust said on Thursday that its research showed most European countries had failed to propose strict enough plans for 2008-12.
"If the current national allocation plans are allowed to stand, it could seriously undermine the credibility of the EU trading scheme and the mechanism of carbon trading as an effective way to tackle carbon emissions," Michael Grubb, chief economist at the Carbon Trust, said in a statement.
Only Britain, Spain and Italy had submitted tough enough plans, the Carbon Trust said.
Environmental group WWF submitted a statement to the Commission on Thursday with signatures from more than 50 economists calling for the scheme to be strengthened.
The economists urged the EU to change the scheme so that permits were auctioned off to industry in the future instead of given away for free by governments.
Dimas said the Commission would issue a policy document in the coming days launching a review of the scheme. He said auctioning would be studied in the review, particularly in light of windfall profits that some energy companies had made as a result of the system.
"This communication will address the scope of the scheme, how it should be simplified, made more predictable, how compliance should be strengthened and how it can be linked with emissions trading schemes elsewhere," he said.
He said Brussels would present a proposal, likely by the end of this year, for all airlines flying into and out of the EU to be part of the existing emissions trading scheme. EU lawmakers have suggested that a separate scheme for aviation be created.
(Additional reporting by Stuart Penson in London)