UPSTREAM REFORM OF THE EU EMISSIONS TRADING SYSTEM

Letter published in The Guardian, 2011-06-01.

Part of the reason for record emissions of fossil carbon is that the EU emissions trading system is not working. But some simple reforms would make it much more effective.

Instead of issuing allowances to a relatively large number of emissions-producing businesses it would be simpler, cheaper and more effective to control fossil carbon "upstream", at the places where coal, oil and gas come out of the ground, or are imported. This would provide control over 100% of emissions in the EU instead of less than 50% with the system as it is now.

With caps on fossil carbon determined in the light of climate science, and without free allocations of allowances, a reformed system is likely to raise the price of emissions much closer to its proper level. "Border levelling" measures in the proposals would ensure that businesses within the EU would not be put at a commercial disadvantage, and they would provide a solution to the problem of "import emissions" arising from fossil carbon that is embodied in traded products.

Money raised from the sale of permits may be used to help businesses and people make the transition to the clean, green economy of the future. More information about these and other benefits of upstream reform of the EU ETS may be found at www.k2support.org.

Dr Gerry Wolff

The Kyoto2 Support Group