Warning: temporary carbon market fix will not solve EU’s climate challenge | WPN World People News

Greenpeace welcomed the European Parliament’s final approval today of the ‘backloading’ proposal to temporarily curb the oversupply of allowances in the EU carbon market. However, this will only have a short-term impact. In fact, as the withdrawn allowances are supposed to re-enter the carbon market, they could undermine the EU’s post-2020 climate and energy efforts, Greenpeace warns.

“This’s plan for Europe’s carbon market is merely a sticking plaster. Without permanent removal of allowances, the spectral surplus will keep haunting the EU’s green investment conditions into the next decade. Only cancellation of some allowances and robust climate and energy targets for the 2020-2030 period can exorcise the EU’s carbon demons”, said Greenpeace EU climate policy director, Joris den Blanken.

This vote will mean that some 900 million emission allowances will be temporarily removed from the market, in an effort to improve the price of carbon permits to a level at which they can encourage investment in clean production technologies.

A recent report from consultancy Ecofys, commissioned by Greenpeace, shows that the EU carbon market’s problems will persist, even if the backloading plan is adopted. The report shows that both backloaded allowances and other unused emission allowances accumulated by 2020 are supposed to be carried over for use after 2020. This means that an EU domestic emissions reduction goal of 40 per cent for 2030, would in reality lead to only a 33 per cent real cut in emissions. Without further measures, the wide surplus of allowances will continue to weaken the EU’s climate goals into the next decade.

Greenpeace is seeking robust and binding targets of at least 55% for domestic emissions reduction, 45% for renewable energy and 40% for energy savings for the EU for 2030. Along with real structural change to the emissions trading scheme, these can create the right investments in a clean energy future.

Source: Greenpeace EU Unit