Of all the stakeholders at the negotiating table in Paris this past December, the EU was perhaps the most vociferous in its attempt to try and hammer out an international climate treaty. The document the summit produced requires nations to submit plans for how they’ll reduce their greenhouse gas emissions, and notably lacks any sort of robust enforcement mechanism. Now, it seems the EU ought to be thankful that the climate treaty turned out to be so flimsy, as it’s on track to emit two billion more tons of carbon dioxide than was agreed three months ago, according to a European Commission document.
As the Guardian reports, the bloc’s lackluster Emissions Trading System is to blame:
Carbon prices will rise too slowly to cut industrial emissions as much as needed, says a confidential note prepared for MEPs on the environment committee, which the Guardian has seen. […]
“The current proposals are not consistent with what was agreed in Paris and they are not even in line with what’s necessary to stay below 2C,” [Green MEP Bas Eickhout] told the Guardian. “What kind of signal is that sending our partners? These Emissions Trading System (ETS) numbers need to be changed now to make them consistent with the Paris agreement.”
The EU’s ETS has a long, sordid history, as the bloc has struggled to establish a price for carbon in its trading scheme that is high enough to induce emissions reductions, while not so high that important industries lose too much money (and potentially decide to site carbon-intensive production outside of the bloc). This is a problem that any regional carbon-trading system faces, but the EU’s version lacks the necessary mechanism to tie the carbon market to the bloc’s broader economy, which meant that when growth slowed significantly in the wake of the 2008 financial crisis, the price of carbon plummeted as heavy emitters hunkered down.
Recognizing this as a major problem, Brussels set a date for implementing a mechanism that will allow it to calibrate more closely the number of carbon credits on offer in the market. But this won’t be put in place until 2019 at the earliest, and only if member states sign off on it.
In the meantime, the EU apparently has no intention of beefing up its emissions reduction targets until 2020 at the earliest, despite the fact that the Paris treaty “requires” signatories to review their climate goals in 2018. The thinking in Brussels seems to be that the current target—a 40 percent reduction in greenhouse gases by 2030 as compared to 1990 levels—is sufficient for at least another four years.