The European Emissions Trading System: options for reform

02/11/2014 - The most crucial instrument of European climate policy, the Emissions Trading System (ETS), is currently questioned to deliver the desired results as the sum to pay per ton of carbon is dwindling. To move beyond a narrow discussion of the adequate allowance price level, the association of European national academies of applied sciences Euro-CASE along with the Mercator Research Institute on Global Commons and Climate Change (MCC) is convening a high-level workshop in Brussels this week. It aims at exploring options for a reform, and to do so by embedding the discussion about the ETS in the context of its interaction with national policies as well as public finance.
The European Emissions Trading System: options for reform
Trading room of the European Energy Exchange in Leipzig. Photo: J.Jeibmann/EEX

“For better or worse, the European Emissions Trading System is a global model, closely watched by decision-makers worldwide,” says Ottmar Edenhofer, director of the MCC and chief-economist of the Potsdam Institute for Climate Impact Research (PIK). Together with Bernard Tardieu of the French National Academy of Technology (NATF), he is chairing the Euro-CASE Energy platform. “Building on the experience we now have with this unique market-based approach to climate policy, the cap-and-trade scheme clearly needs to be developed further,” Edenhofer points out. “So we hope that science can contribute insights to tackle this challenge.”

One of the topics will be the recent proposition of the EU Commission under the EU 2030 climate and energy targets, which in the next months will be debated by the member state governments in the EU Council. "One of the most important elements in a reform of the ETS might be to fix in the short term an ambitious target of long-term emissions reductions,” says Brigitte Knopf who leads the group Energy Strategies Europe and Germany at PIK and who has been an organizer of the workshop. Yet beyond this, the scientists will also debate whether other sectors than only power generation – for instance transport and heat – should be included in the ETS.

Amongst the participants of the workshop, there is Rob Stavins from Harvard University and Denny Ellerman from the MIT Sloan School of Management as well as Jos Delbeke, Director General of the EU Commission’s GD Climate Action, and Brian Ager, Secretary General of the European Round Table of Industrialists. They will try to lay the intellectual foundation for a follow-up meeting at which reform options will be discussed with key policy-makers in late 2014.


About Euro-CASE:

The European Council of Academies of Applied Sciences, Technologies and Engineering is an independent organization of National Academies of these sciences from 21 European countries. In Germany, this is Acatech. Through its Member Academies, Euro-CASE has access to around 6,000 experts and provides impartial and balanced policy advice on technological and innovation issues to European institutions and national governments.



About MCC:

Jointly founded by Stiftung Meractor – which provides the core funding – and PIK, the Mercator Research Institute on Global Commons and Climate Change in Berlin aims at generating 'maps of knowledge' to guide policy in an iterative societal learning process. Assessments of the new scarcities created by global economic growth as well as of pathways to sustainability explicitly address risks and uncertainties, in constant dialogue with the users of the results.


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