Corporate Europe Observatory

Exposing the power of corporate lobbying in the EU

  • Dansk
  • NL
  • EN
  • FI
  • FR
  • DE
  • EL
  • IT
  • NO
  • PL
  • PT
  • RO
  • SL
  • ES
  • SV

Commission should consider dropping EU ETS, say environmental NGOs

Seven years after its start up, the EU Emission Trading System has failed to achieve its own objectives. The European Commission itself came to this conclusion as it proposed different options to fix the trading mechanism today. An important option is missing from the Commission’s document: the abolishment of the EU ETS after 2020.

“The ETS is not fit for purpose. It has generated windfall profits for polluting corporations, postponed the needed transition away from fossil fuels and its unintended consequences are locking the EU into another generation of energy production based on fossil fuels. These structural flaws remain unaddressed by the Commission”, says Joanna Cabello from Carbon Trade Watch.

The Commission exclusively proposes options to stabilise the price of carbon permits which are traded within the EU ETS. Due to the recent collapse of the carbon price the EU ETS is not providing the price signal for investment in low carbon technology and infrastructure that its proponents have been promising.

“This is exposing the inner contradiction in the EU vision about the ETS: can a trading mechanism, where the cap is based on projections of industrial emissions years into the future ever provide a reliable price signal? Experience shows that it cannot”, states Jutta Kill from Fern.

An additional structural shortcoming which remains unaddressed by the Commission’s proposal is the hole in the cap – the use of carbon offsets in the EU ETS. Offset projects in the South haven’t generated the sustainable development they were said to deliver. Moreover, as offsets do not reduce but only displace emissions, any trading scheme allowing the use of offsets will delay the unavoidable reduction of emissions.

Rather than catalysing the transition towards the low carbon society that Europe envisages, the ETS has been a mechanism standing in the way of bold political decisions that could end our current fossil fuel based energy model..In its 2012 World Energy Outlook the International Energy Agency warned yesterday that 2/3 of the proven fossil fuels reserve must stay in the ground in order to avoid a temperature rise by 2 degrees Celsius. It requires political will not a marked based mechanism to turn advices like these into practice.

“Instead of taking their responsibility, politicians have voluntarily put their main instrument to fight climate change in the hands of the financial markets. As we know market mechanisms have their own dynamic. Profit making and not fighting climate change has become the overriding objective of the players involved in carbon trading. It is an illusion to believe that proposals like the one presented now by the Commission would be able to substantially improve the EU ETS”, Cabello concludes.

* Signatories are: Attac France, Carbon Trade Watch, Corporate Europe Observatory, Counter Balance, FERN, Re:Common

For more information contact
Joanna Cabello // joanna@carbontradewatch.org // +32493829459

Related issues: 
 

It's almost six months since EU Climate Commissioner Miguel Arias Cañete claimed to have negotiated an historic global deal to tackle climate change at COP21in Paris. The 3 May also marked a year and a half of Cañete being in the job. However, he and his his boss, Vice President of the Commission Maros Šefčovič, continue to give privileged access to fossil fuel players trashing the climate, who have enjoyed eight meetings to every one involving renewable energy or energy efficiency interests since the Paris deal was signed. Rather than a change of direction, it's business as usual for the European Commission following the Paris Agreement, which is great news for Big Energy but a disaster for those serious about tackling climate change.

In the middle of May over 4000 people from all over Europe gathered in the Lusatia region in Eastern Germany. The plan? To block a Vattenfall-owned opencast lignite mine.

In light of the ITRE Opinion and forthcoming discussion on the proposed Directive to reform the Emissions Trading System (and “enhance cost-effective emission reductions and low-carbon investments”), CEO offers comments. 

Ultimately, revisions of this sort are nowhere near enough. The new ETS Directive requires some "damage limitation." But it is also a time to reflect on the need to move beyond emissions trading at the heart of EU climate policy. There are many ways to achieve this: http://corporateeurope.org/climate-and-energy/2014/01/life-beyond-emissi...

A revised Emissions Trading Directive is like red meat for the hungry pack of lobbyists that work the corridors of Brussels’ political institutions. Even minor differences in how pollution permits are handed out can result in profits or savings of millions of euros to big polluters.

A few weeks after the May coup against Dilma Rousseff by conservative parties backed by the country's largest corporations, Brazil's “interim” government, led by Michel Temer, signed an emergency loan to the State of Rio de Janeiro to help finance infrastructure for the 2016 Olympics. The bailout was conditional to selling off the State's public water supply and sanitation company, the Companhia Estadual de Águas e Esgotos (Cedae). 

When we interviewed City Councillor and chair of Rio’s Special Committee on the Water Crisis Renato Cinco, in December 2015, he was already warning against such privatisation threats and provided important background information on the water situation in Rio.

José Manuel Barroso's move to Goldman Sachs has catapulted the EU’s revolving door problem onto the political agenda. It is symbolic of the excessive corporate influence at the highest levels of the EU.

Corporate Europe Observatory, Friends of the Earth and LobbyControl today wrote to Martin Schulz, President of the European Parliament, calling on him to investigate Angelika Nieber MEP over a possible conflict of interest.

CEO presents some first reflections on the UK's vote for Brexit.

 
 
 
 
 
-- placeholder --
 
 
 

The corporate lobby tour