Euro MPs on the Environment Committee have voted to strengthen the Emissions Trading Scheme (ETS) – widely viewed as the corner stone of EU strategy to combat climate change -in order to to ensure that carbon emissions are cut by at least 20% by 2020 and that the EU has a strong hand in global emissions reduction negotiations.
The ETS ‘cap and trade’ system allows companies to buy and sell carbon allowances within a progressively tightening cap. Until now the ETS has included a generous amount of free allowances but the changes voted this week mark the start of a much more restrictive regime. The power industry will have to buy all its allowances from 2013, for example, and there will be an increasing requirement for purchase of allowances for CO2 emissions from aircraft
Fiona Hall MEP, Lib Dem MEP for Gateshead, says that the changes are an essential step towards an international consensus on carbon emission trading and vital if global temperature rises are to be kept under 2 deg C and not allowed to "go critical". In the New Year, preparations will get underway in Poznan for the 2009 global climate change summit in Copenhagen.
Fiona said, “This result is a victory for progressive industry which recognises the Stern conclusions that global warming has huge long-term costs. Of course there has been some pressure from industry but it has been important to avoid loopholes which would have undermined the foundations of the Emissions trading process.
"The way to deal with worries about global competitiveness is through the forthcoming Commission analysis of carbon leakage and I will continue to work closely with North East companies who have specific concerns on this.”
As well as emissions trading, the Environment Committee also voted to ban the building of new coal-fired power stations from 2015, unless they are equipped with carbon capture and storage technology (CCS) to curb their CO2 emissions. A report by Lib Dem MEP Chris Davies which calls for the use of up to 500 million allowances from the emissions trading scheme (this could easily exceed £7 billions) to meet the additional costs of CCS installation has been adopted and would ensure carbon capture and storage technology could make a healthy contribution towards saving thousands of CO2 emissions.
Following the Environment Committee votes, negotiations will start with the Council (Member States ministers) with the aim of completing the legislation in good time for the Poznan negotiations in the New Year.
Fiona said, “The North East is at the forefront of new energy technology and can really benefit from this week's Environment committee votes. In the negotiations that are now starting I will continue to work closely with North East industry to make sure that our lead position on efficient processes and forward looking technology is supported.”