European leaders are now rushing to make decisions on how to drastically cut dependence on Russian fossil energy imports. Russiaâs invasion of Ukraine has exposed Europeâs energy security vulnerabilities like nothing else could have. It also means Europeâs clean energy transition will need an overhaul, and a newly designed optimal pathway created, and fast. Wojciech DÄ browski, President at PGE Polska Grupa Energetyczna, explains that it must also … [Read more...]
Donât let high gas prices stop the EU ETS from doing its real job
The EU ETS carbon price reached a high of over âŹ60 per tonne in September. Some are arguing that its role in the current gas price crisis is a reason why it should be reined in. But Milan Elkerbout at CEPS Policy Insights explains that the EUA (European Union Allowance) has multiple purposes. It is an incentive to invest in low-carbon solutions such as renewables, efficiencies and new methods. The sooner we pass the cost hurdle of integrating … [Read more...]
Land Use and Forestry: existing LULUCF rules allow EUâs carbon sink to decrease. Change them
The EUâs current Regulations for Land Use, Land Use Change and Forestry (LULUCF) allow the regionâs carbon sink to decrease, explains Ulriikka Aarnio at CAN Europe. Itâs due to exclusions and a lack of transparency and proper accounting for emissions. As a result, the EUâs carbon sink has already decreased significantly in the last few years, extracting only 265 Mt of CO2 in 2019. Different activities both emit and absorb carbon. 2019 saw 135 Mt … [Read more...]
Chinaâs energy system: record renewables expansion, but coal still dominates
Lara Dombrowski and Simon Göss at Energy Brainpool give the latest headline figures for Chinaâs energy system. In 2020 electricity generation in China went up by 298 TWh â an increase equal to 60% of Germanyâs total. That year, renewables capacity increased more than ever before. That made China responsible for nearly 50% of global renewable capacity additions. But China has higher CO2 emissions than all the OECD countries combined. And continued … [Read more...]
Changes to national targets and forestry mean ECâs 55% plan is weaker than it looks
The ECâs plan to reduce the blocâs emissions by 55% by 2030 compared to 1990 levels, instead of the previously agreed 40%, is very welcome but its implementation plan is flawed, says William Todts at Transport & Environment. The EU Emissions Trading System (EU ETS) wonât be enough on its own. So the plan allows nations to include âmanagingâ forests and âtree plantationsâ, a big change because forests were not part of previous emissions … [Read more...]
Europeâs 55% emissions cut by 2030: proposed target means even faster coal exit
The EC is proposing a target emissions reduction of 55% by 2030 compared to 1990 levels, instead of the previously agreed 40% (which the EU is on course to surpass). The main tool for achieving it will be the EU Emissions Trading System (ETS). Prices for allowances will rise, making coal increasingly uncompetitive. Sören Amelang, Kerstine Appunn and Julian Wettengel at CLEW talked to a number of experts who say the new target implies a near total … [Read more...]
California learns even flexible Emissions Markets wonât guarantee price stability
In May, emissions allowance prices hit rock bottom in California. How can cap-and-trade work properly when prices are so volatile and difficult to predict? It makes life very difficult for businesses and investors, not to mention the state. Changes to the rules are being proposed to introduce more flexibility into the effective price floors, ceilings and the availability of allowances. But Severin Borenstein at the Energy Institute at Haas … [Read more...]
EU ETS: The Market Stability Reserve should focus on carbon prices, not allowance volumes
The Market Stability Reserve (MSR) aims at providing carbon price stability for the EU Emissions Trading Scheme (EU ETS). But serious questions are being asked about how much stability â if any â it provides, say Michael Pahle at the Potsdam Institute for Climate Impact Research and Simon Quemin at the LSE's Grantham Research Institute. They argue that the MSR rules are too complex, have difficulty accommodating changing EU and national policies, … [Read more...]
Re-shaping the EU ETS as a safety net, not a driver
The EU ETS (Emissions Trading System) has struggled to cope with the current economic crisis which has caused a drop in the European carbon price, while the expected drastic drop in 2020 emissions will only add to the existing surplus of allowances. This highlights how necessary it is to reform the mechanism for managing this surplus or even to implement a carbon floor price, explain Charlotte Vailles at I4CE and Nicolas Berghmans at IDDRI. They … [Read more...]
Why a Carbon Border Tax? Because existing tariffs favour dirty over clean imports
Carbon border adjustments are carbon taxes imposed on carbon intensive imports that have not been carbon-taxed at source. Itâs a good way to penalise âdirtyâ goods and remove any competitive advantage the exporter gains from not paying for its pollution. Regions across the world are trying to figure out the best way â how, when, if at all - to roll them out. But Joseph Shapiro, writing for the Energy Institute at Haas, points out that the … [Read more...]
EU needs clear European Green and Solidarity Pact by September
Stark predictions around the unprecedented economic challenges facing Europe (and the world) are starting to take shape. The possible solutions must keep pace with them. Here, Marc-Antoine Eyl-Mazzega at the IFRI Centre for Energy & Climate lays out those challenges and robust policy answers that can keep us on a net-zero emissions track while stimulating economies, creating jobs, and maintaining social justice. Itâs no surprise that there is … [Read more...]
How do we accelerate EU decarbonisation now?
The economic stimulus needed to overcome the current pandemic requires significant resources. But it comes at a time when we need to accelerate the energy transition, which is currently part of the European Green Deal and will also require an increase in resources. Andrei Marcu at ERCSTÂ examines how the transition will be funded, what are the sources of funding and how they relate to and will be impacted by the current health situation. A range … [Read more...]
The coalition for an EU-ETS carbon price floor is reaching critical mass
The EU Emission Trading Scheme (EU-ETS) is bound to play a major role for ratcheting up climate policies in both the EU and its member states. After a prolonged period of low prices that questioned the ETSâs viability, the recent price run upwards in the wake of a major reform has sparked confidence that from now on âeverything goes in the right directionâ. But this confidence is misguided and ignores major risks for the scheme, argue Michael … [Read more...]
Why coordinated Dutch-German climate action is critical for Europe
Both the Netherlands and Germany are about to propose major new national climate measures. If the proposals become law, they will enforce some of the most stringent national targets for GHG reductions in the world. Itâs why, on 22 August, Dutch Prime Minister Mark Rutte will host a meeting with German Chancellor Angela Merkel and her âclimate cabinetâ. Coordinated Dutch-German climate action can make these neighbouring countries role models for … [Read more...]
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