Tory MEP to lead ETS reforms

18th September 2015

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  • Adaptation ,
  • Mitigation ,
  • Carbon Trading ,
  • Environment Agency


Alison Morrissy

Conservative MEP Ian Duncan is to spearhead the European parliament's reform of the EU emissions trading system.

MEPs have appointed Duncan, Conservative MEP for Scotland, as "rapporteur" to take the lead in examining and reporting on proposals from the European commission to reform the ETS after criticism that the current system is failing to incentivise polluting industries to reduce greenhouse-gas emissions.

"The ETS as it stands is broken. This may be our only chance to prove to Europe and the rest of the world that emissions trading systems can work," said Duncan.

The EU ETS is the largest cap and trade system in the world and covers more than 11,000 power stations and industrial plants in 31 countries, as well as airlines. But it has been subject to sustained criticism in recent years for an over supply of free pollution allowances, which seen prices plummet and leaving major polluters with little incentive to cut greenhouse emissions.

Under the new proposals, the annual cap is to decrease by 2.2%, compared with the current 1.74%, which lasts to 2020. Also a market stability reserve (MSR) comes into force in 2021. The MSR will regulate and remove surplus allowances when thresholds are breached, and will, says the commission, help restore short and long-term confidence to the carbon market.

Duncan, who was shadow rapporteur on MSR, is tasked with responding to the commission's reform proposals and setting out how the ETS will match up the EU's overall target to reduce greenhouse-gas emissions by 40% against 1990 levels. "We need to strike the right balance between protecting industry and jobs, and meeting our climate change obligations. I don't think those goals are mutually exclusive, but I do know that the ETS as it stands is not delivering either," Duncan said.


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