There is a large discrepancy between what companies have to pay for carbon pollution under the EU Emission Trading Scheme (ETS) and how much it costs EU citizens according to an infographic created by Climate Action Network (CAN).
CAN Europe urges Members of the European Parliament’s industry committee (ITRE), voting on the reform of the ETS on 13 October, to substantially cut the supply of carbon pollution permits to lift their price.
“Damaging the climate is extremely cheap for Europe’s factories and power stations” – Wendel Trio, Director of CAN Europe said. “With current prices of climate pollution being 12 times lower than actual costs, EU citizens are being left to pick up the tab for polluting companies.”
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The current carbon price under the ETS is much too low to drive a shift away from fossil fuels to more energy efficiency and renewables. The reforms proposed by the European Commission will not increase prices much above EUR10 for many years to come, making the ETS irrelevant for the efforts to limit temperature rise to 1.5°C in line with the Paris Agreement.
As the price will raise when permits become scarce, CAN Europe calls upon the industry committee to vote for tightening of the supply in the system via:
- Accelerating the pace of emissions reductions (the “Linear Reduction Factor”)
- Aligning the starting level of the new carbon budget with actual emissions
- Reviewing ETS cap in line with the Paris Agreement
- Permanently cancelling excess allowances
In the draft compromise that will be subject to the committee’s vote, ITRE puts off confronting the failure of the ETS to drive adequate emission cuts. If passed, the compromise would kick the can down the road to the environment committee to make the ETS truly fit for purpose.
The infographic is available online here.