CEEP: Climate agreement an opportunity to review Europe’s emission trading system

CEEP: Climate agreement an opportunity to review Europe’s emission trading system

The COP 21 climate conference in Paris was concluded by the adoption of an international agreement. The aim of the document, signed by close to 200 countries, is to reduce the increase in the global temperature, by below two degrees Celsius over the pre-industrial level. According to experts from Central Europe Energy Partners (CEEP), the concept of an emissions trading system (ETS), adopted by the European Union, has not been backed by other countries. This indicates how important it is for the EU to review the entire system.

The fact that the adopted agreement has a global reach is undoubtedly an important achievement in the ongoing combat against climate change. It is also a major commitment. According to Marcin Bodio, the CEO of CEEP, the results of the Paris summit will need to be evaluated at the global, not regional level.

„We need time to adopt the provisions of the agreement, and subsequently, launch the process of their implementation. The next climate conference, scheduled for 2023, will be a good opportunity to review the progress made. This date seems quite distant, but, when you take into consideration the perspective of average investment processes in the energy sector and energy-intensive industries, there is not that much time left,” Mr. Bodio observed.

Another major achievement of the Paris summit is how it helped to raise awareness of climate change at the global level.

„In the course of the entire conference, we witnessed vigorous discussions which spurred various schemes and plans to reduce the increase of global temperatures. The most ambitious position was taken by the European Union, which, not only advocated a decrease of the CO2 emission level by over 40%, up till 2030, but also propagated the mechanisms of the European emissions trading system (ETS). It must be emphasised that this concept was not widely backed by the delegations present. Each country, which signed the Paris agreement, chose an autonomous path to reach the defined objectives, and these autonomous solutions are predominantly underpinned by modern technology,” the CEO of CEEP stressed.

Another widely discussed solution, which had an impact on the agreement, was balancing CO2 emissions with the planting of new trees and halting the deforestation process.

„This proves that the European emissions trading system cannot be treated as the only solution to combatting the results of industrial emissions. The Paris agreement provides a welcome opportunity to discuss the current concept of the ETS on the EU’s internal forum. This also closely relates to the so-called market stability reserve (MSR) mechanism, which foresees the maintenance of very high prices of CO2 emission units. In a situation whereby other countries worldwide will follow a different path, retaining the ETS in its current form, will be equal to a further deterioration of the competitiveness of the EU’s industry. We are able to comply with the EU’s targets of reducing CO2 emissions in 2020 with a surplus, in line with the economic goals, without raising the prices of CO2 emission units and implementing the MSR mechanism,” Mr. Bodio underlined.