Carbon prices: perspectives for the development of the EU emissions trading scheme (EU ETS) by 2030
Date: 10th December, 1pm – 3pm
Location: French Pavilion
I4CE – Institute for Climate Economics and Enerdata have conducted a research program on the EU ETS, the EU’s central climate policy, to prepare economic policy makers for the revision of the 2030 climate and energy package and the EU ETS directive for its Phase IV. This event presents options to improve the effectiveness of the EU ETS.
- Benoît Leguet, Director, I4CE, highlighted the central role of the EU ETS, to achieve the GHG reductions target cost effectively. He stressed the importance of complementary economic instruments to overcome a wide of investments barriers, but their impact on the quantity based EU ETS should be assessed in a transparent manner. These instruments have driven more than half of emissions reductions in the 2005 to 2011 period, and together with the economic downturn, they have led to a growing surplus and a fall in carbon prices. The Market Stability Reserve (MSR) will help restore short term scarcity and increase resilience, but adequate governance is needed. View Benoit’s presentation.
- Manfred Hafner, Vice-President Consulting, Enerdata, insisted on the need for setting up complementary policies (Renewable energies, energy efficiency) and objectives in line with emissions reduction target. These complementary polices are likely to become very expensive if not adjusted with GH target accordingly. He highlighted that the enforcement of the MSR will trengthen allowance price in the EU ETS (+25% in 2030 vs reference). View Manfred’s presentation.
- Jean-Yves Caneill, Head of Climate policy, EDF, acknowledged that the main drivers of carbon price in EU ETS are short term, whereas they should more reflect the long term marginal costs of abating technologies in line with long term targets. He highlighted that the price is too low to influence operations and to forge credible high CO2 price expectations on the long term which are the one mattering for investments. Some kind of price corridor, or increased management of the MSR, as well as real target by 2050 could reinforce long term credibility of the price. View Jean-Yves’s presentation.
- Stéphanie Croguennec, Head of Clean air Department at Department of Energy and Climate Change of Ministry of Ecology, Sustainable Development, and Energy, highlighted that the ambitious European target by 2030 requires an efficient carbon pricing scheme, which however cannot do everything all alone, and needs a combination of policies and measures. A reformed and more flexible EU ETS with the market stability reserve will be a key instrument in this regard. View Stephanie’s presentation.
- Florent Journet-Cuenot, Senior Advisor on Energy and Climate / Greenhouse gases, Sustainable & Environment Division, Climate-Energy TOTAL insisted on the need for a long term target of CO2 emissions reduction that is clear and easily understandable for operators in order to give visibility for their investment decisions . He recalled that the decrease in CO2 emissions will be effective once the scope of regulations will be the widest possible to limit CO2 emissions imported without cost internalized. To prevent the risk of carbon leakage, the free allocation should be made more flexible and justified to avoid inducing windfall profits. Finally, the EU must remain open to all linking of the EU ETS with other jurisdictions.