There have been a few developments and articles since our last post on the Emissions Trading Scheme:
It has been reported that emissions capped by the ETS in 2014 have fallen according to this article on the Reuters website. The article contains a variety of statistics on actual emissions measured, both within the EU and also in other parts of the world.
This brings us on to a very informative article on the Platts website about the events that led to the collapse of the carbon price, the pros and cons of this, and where it is expected to lead the market. In addition the article talks about the different views across the EU about when and how the bringing in of “back loading” using the Market Stability Reserve(MSR) should start. It also talk about how once agreed, the MSR places the ETS well to be used as part of the next round of climate change talks in Paris at the end of the year. It concludes with some interesting predictions, and states that on the one hand the MSR will stop the carbon price from collapsing further, but on the other additional mechanisms will need to be put in place to achieve the wider energy objectives. The article can be found here.
Preparations for Paris also moved forward with the approval of the Intended Nationally Determined Contribution (INDC) of the EU and its Member States. The Council of Environment Ministers approved a commitment to reduce greenhouse gases to a 40% reduction by 2030 of 1990 levels, excluding international credits.
This article on The Carbon Brief talks about Tim Yeo’s (chair of the UK’s energy and climate change committee) suggestion that a global cap be introduced on linked trading schemes worldwide to match the IPCC’s latest numbers on the maximum amount of carbon that can be emitted to keep temperatures from rising more than two degrees Celsius. The article goes on to talk about the hopes of an international trading scheme and the potential difficulties in creating one.
Finally, this article on “Recharge News” talks about the proposed climate levy on German fossil fuel fired power stations. The article looks at how this would interact with the ETS as well as the views on how it will impact existing generation.
Overall it would appear that the ETS is going to continue to undergo changes in the run up to the Paris talks in December.