Memorandum submitted by WWF-UK
INTRODUCTION
The EU Emissions Trading Scheme (ETS) is the
most ambitious and innovative intergovernmental policy so far
aimed at reducing greenhouse gas emissions. Europe is leading
the way in implementing market based, cost-effective solutions
to a global problem. The ETS covers nearly half of Europe's CO2
emissions, so its success is vital to deliver the EU's targets
under the Kyoto Protocol. A successful ETS could also form the
cornerstone of future global agreements to fight climate change.
However, the system is being seriously undermined
by a number of mistakes made during the first phase of the scheme
(2005-07)—with the result that it is currently failing to
deliver real cuts in greenhouse gas emissions. Governments must
now learn from these mistakes and improve the system in the second
(2008-12) and subsequent phases.
Phase II
Under the terms of the Directive Member States
must submit their National Allocation Plans (NAPs) to the Commission
for approval at least 18 months before the start of the new phase.
However, so far only 13 (as of 2 October) including the UK's have
been submitted. Once submitted the European Commission has three
months to reject/accept/seek amendments to NAPs. Amendments to
the phase II NAPs will not be accepted after 31 December 2006.
The time left to influence the development of phase II NAPs is
therefore now rather short.
The review
The European Commission is also about to commence
a review of the scheme (due imminently) as required by Article
30 of the Directive, which will look to make changes to the scheme
post 2012 (phase III and beyond) and will seek to:
1. analyse the functioning and design of
the system;
2. evaluate the impact of expanding the ETS
to other sectors and gases; and
3. understand the real impact of the ETS
on competitiveness.
The review offers a key opportunity to put right
the current failings of the scheme and to seek assurance that
the ETS will continue to play a key role in future EU climate
change policy.
1. PHASE I—LESSONS
LEARNT
Please see the enclosed WWF report "Carbon
countdown" for a review of phase I.
In summary though, the key findings were:
— The collective cap across Europe
was very weak. This was further corroborated when the emissions
data for 2005 for the ETS sectors was released. In Europe overall
CO2 emissions from industry were 44 million tonnes
below permitted levels under the scheme indicating that there
had been a vast over allocation.
— Lack of harmonisation across Europe
with regards to eg cap setting, allocation methodology, rules
for new entrants etc.
2. PHASE II—UK
FOCUS
A. CAP
How likely is it that UK firms would successfully
reduce emissions by at least 7 MtC by 2012, in line with the proposed
phase II NAP?
In the UK Government's NAP for phase II[7]
an annual cap of 64.6 MtC (237 MtCO2)—for installations
that were covered in phase I—is proposed. This limit is
just over two million tonnes of carbon (3.5%) below the cap in
the current phase of the scheme (66.9 MtC or 245 MtCO2)
and as in phase I the reduction of allowances against business
as usual emissions projections will be borne entirely by the power
sector (referred to as Large Electricity Producers in the NAP).
The proposed annual cap for phase II is equivalent
to a reduction of 8 MtC below business as usual emissions in 2010
and, when combined with other policies and measures for the non-traded
sector set out in the Government's revised Climate Change Programme
released this March will only, at best, achieve a 16% reduction
in emissions by 2010 (from 1990 levels)—as opposed to the
20% that the Government has committed to achieve domestically.
Whilst WWF would not expect the ETS to deliver all the UK's emissions
reductions it is important that it contributes an equitable share
compared to the sectors which fall outside the scheme.
Therefore, WWF consider that the cap for phase
II should have been set at 60.5 MtC per year. In 2000 when the
Climate Change Programme began, the traded sector accounted for
approximately 46% of the UK's CO2 emissions. An annual
cap of 60.5 MtC would ensure that the traded sector's share remains
at 46% in 2010[8].
WWF supports the Government's intention to require
reduction in emissions from the power sector, given that it:
— is the biggest source of CO2
emissions, and its emissions have increased by 19% since 1999
(largely due to a switch back to coal burn);
— is least affected by international
competition;
— is the sector which is most able
to pass on its costs; and
— is able to make large windfall profits
(a recent Carbon Trust report[9]
estimated that the UK power sector had made approximately 1 billion
Euros in the first year of trading).
However, for phase II it is now appropriate
for manufacturing industry—particularly those sectors less
exposed to international competition—to receive allocations
which are tighter than business as usual. It is unacceptable that
emissions from major business should be increasing at a time when
the UK is struggling to meet its domestic CO2 targets
(eg in the draft UK NAP, the proposed allocation for industrial
sectors in 2010 was approximately 19% above average emissions
in 1998-2003). In addition—whilst the UK was short of allowances
overall in 2005—this was because of high emissions from
the power sector due largely to a return to coal burn. The allocation
to energy intensive industries was in fact 9.5 million tonnes
above what they actually emitted. As long as industry is able
to comply with the ETS without having to trade, the full cost
of carbon will not be factored into investment/production decisions.
B. ALLOCATION
METHODOLOGY
Has the government identified the correct proportion
of allowances to be auctioned in phase II? Should these be drawn
solely from the power sector's allocation? What will the effect
of this auctioning be on industry and the price of carbon?
The UK is so far one of the few countries that
has committed to auction a percentage of its allocation during
phase II of the scheme. Currently very few member states, other
than the UK, have committed to some level of auctioning eg Ireland
0.5%, Netherlands 4%, Poland 1.5%, Lithuania 2.7%, Luxemburg 4.8%,
Belgium 0.29%, Austria c 1%[10].
In the UK it is proposed that 7% of the allowances
will be sold and these will be deducted from the power sector's
allocation. The impact of the ETS on electricity prices is dependent
on the price of carbon and, according to the overarching RIA[11]
which accompanied the draft NAP is "expected to be independent
of the number of free allowances allocated to generators"
presumably because the power sector will pass on its costs regardless
of whether it has had to buy its allowances or been given them
for free. As the sector therefore that is most able to pass on
its costs and also most protected from international competition
we agree that for phase II allowances to be auctioned should be
deducted from this sectors allocation.
At an EU allowance price of between 15 and 30
Euros auctioning 7% of its proposed annual allocation would generate
between 258 million and 517 million Euros worth of revenue in
the first year of phase II alone. This revenue could be used to:
— further develop and implement low
carbon and energy efficiency technologies; and
— and potentially partially (if compatible
with state aid rules) be recycled back to those few industrial
sectors which are most exposed to international competition.
Indeed in his speech on 29 June about the UK's
NAP for phase II, David Milliband stated that the government intented
to establish an environmental transformation fund. However, it
is not clear at this stage whether the funds from auctioning of
allowances will contribute to this fund and if so what proportion
or how the rest of the funds will be spent.
Although the UK's commitment is short of the
10% maximum which WWF advocated, the decision to auction will,
as well as generating considerable amounts of revenue, ensure
that the power sector, the single biggest emitter of carbon emissions,
is obliged to pay for some of its right to pollute up front. It
will also help to partially redress the windfall profits gained
by this sector during phase I (and will continue to gain during
phase II). In addition the UK intends to auction surplus allowances
from the new entrants reserve and those not allocated as a result
of closure so in reality more than 7% will be auctioned—though
in total this is still likely to be less than 10%.
C. COMPETITIVENESS
CONCERNS
What have been the effects of phase I so far on
competitiveness of (1) business in the UK, and (2) business across
the EU? What are the key issues for phase II in terms of ensuring
that emissions reductions from EU states are not cancelled out
by the transferring of industry to developing countries?
WWF considers that the impacts of the ETS on
the competitiveness of industry during phase I have been widely
over-stated by the Confederation of British Industry and other
business lobby groups. Research by the Carbon Trust[12]
has shown that, if implemented properly across member states,
the ETS will not significantly threaten the competitiveness of
European industries including most energy-intensive sectors. One
of the few sectors seen as facing significant pressure is aluminium,
which falls outside the scope of the scheme. The Carbon Trust
says: "The EU ETS is the right basic approach for incentivising
change in power generation and in energy intensive sectors while
at the same time minimising competitiveness impacts." In
addition a report for OFGEM concludes that "Overall, there
are no grounds at present for thinking that EU ETS will have major
negative impacts on EU or UK business relative to foreign competitors"[13].
Furthermore, the latest Carbon Trust report
on this issue[14]
states that most participating sectors will profit from the ETS
during phase II even if:
— total free allocation of allowances
is significantly below business as usual emissions projections
(with all sectors contributing some level of cutback depending
on how exposed they are); and
— 10% (the maximum) of allowances are
auctioned.
The report goes on to say:
"...competitiveness is not a serious concern
in terms of the direct impact of phase II EU ETS costs. Rather,
Phase II is likely to be a phase in which most of the participating
sectors can accrue profits from the EU ETS, that can be used to
assist investment, for example in low-carbon technologies."
D. ACCESS TO
PROJECT CREDITS
How well are the EU ETS and the CDM working together?
What needs to be done to better integrate these markets? Is the
CDM funding the right projects?
With regards to access to project credits the
ETS Directive reads:
"In accordance with the relevant provisions
of the Kyoto Protocol and Marrakech accords, the use of the mechanisms
should be supplemental to domestic action and domestic action
will thus constitute a significant element of the effort made."
Importing credits from CDM and JI projects could
make it cheaper for industry in the EU to reduce emissions. However,
access to significant volumes of cheap credits from overseas could
also disincentivise investment in clean technology development
in the EU, slow down innovation and divert attention from the
need to reduce emissions domestically. There is a real concern
that phase II will be awash with cheap project credits transferring
the responsibility of tackling climate change from the industrialized
nations in the EU to developing countries abroad.
For phase II for example the UK has proposed
an 8% (of the total allocation) limit on the use of project credits.
This equals approximately two thirds of the total difference between
business as usual emissions projections and the total cap (ie
the level of effort). No qualitative limit (beyond that established
by the Linking Directive) has been set. Other countries have proposed
even higher levels eg up to 25% of the total cap in Poland, up
to 50% of allocations to installations in Spain.
WWF considers that, in line with the "supplemental"
wording in the Directive the limit on the use of project credits
should be considerably lower than 50% of the total effort. WWF
recently commissioned Ecofys UK to assess the impact access to
large/unregulated amounts of project credits could potentially
have on the scheme during phase II. The analysis focussed on the
following Member States NAPs which account for roughly 80% of
emissions in the scheme:
— Germany, UK, Poland, Ireland (notified
to the European Commission); and
— France, Spain, Italy, Portugal and
the Netherlands (draft NAPs).
The preliminary findings of this study are enclosed
with this submission but in summary:
— Current caps suggest minimal level
of effort beyond Business as Usual (BAU) for a number of countries.
— Allowed use of JI/CDM credits is
significantly larger than the expected shortage so all abatement
could potentially take place outside the EU.
— Allowed use of JI/CDM credits in
phase II of the EU ETS is likely to be below the expected global
supply once the potential use by governments to meet their Kyoto
targets is taken into account.
— Initial estimates show that up to
one third of the project credits available during 2008-12 will
be from non-CO2 gas abatement projects. Industrial
gas abatement projects often have little or no wider sustainable
development benefits and do not help catalyse the transition to
non-fossil fuel based energy systems in project host countries,
nor do they encourage greater energy efficiency.
A full report will be released later in the
year. We will forward this on to the committee when it is available.
We would also argue that imposing a qualitative
limit is also important. In our response to the UK's phase II
NAP consultation we urged the government to only allow credits
from Gold Standard projects to be bought during phase II. The
Gold Standard is an internationally recognised benchmark which
sets important sustainable development criteria for emission reduction
projects[15]—criteria
which are currently lacking from the CDM Executive Board standards.
At present the CDM is dominated by credits generated from projects
to abate industrial gases such as HFCs. These projects have little
or no wider sustainable development benefits and do not help catalyse
the transition to non-fossil fuel based energy systems in offset
host countries nor do they encourage greater energy efficiency.
It is also important that the criteria on additionality are not
watered down. The Gold Standard offers further assurance of additionality.
E. OTHER MEMBER
STATES NAPS—RECOMMENDATIONS
FOR THE
UK GOVERNMENT
The Environment Secretary has said "we will
support the Commission in its efforts to enforce tough caps".
What exactly should the Government be doing to influence this?
We would encourage the UK government to work
both directly with the Commission and other Member State Governments,
and through the Commission's Working Group 3 in order to ensure
that robust NAPs are enforced across Europe. Specifically to encourage:
— tough caps which entail a significant
reduction from business as usual emissions and which will ensure
that the EU-15 meets its Kyoto target of an 8% reduction in greenhouse
gas emissions from 1990 levels during 2008-12;
— greater levels of auctioning (10%)
to ensure that industries begin to consider the cost of carbon
upfront; and
— lower limits on the use of project
credits (considerably below 50% of the effort) to ensure that
the majority of abatement takes place within the EU and that energy
efficiency and low carbon technologies are encouraged.
3. POST 2012
A. CAPS—RECOMMENDATIONS
What have been the effects of the method chosen
for allocating allowances in phase I?
— The use of emissions projections—In
both phase I and phase II governments have relied on future emissions
projections as a method of setting the caps. We remain very concerned
about this. Using this method, whilst giving permits out for free,
clearly acts as incentive for industry to inflate emissions projections
in order to ensure it maximizes the number of permits it receives—which
have a significant financial value on the carbon market. Emissions
data for 2005 supports this view. In Europe overall CO2
emissions from industry were 44 million tonnes below permitted
levels under the scheme. Even in the UK emissions from energy
intensive industries were 9.5 million tonnes below their business
as usual allocation. This fundamental flaw should be rectified
by ensuring that future allocations are based on a "distance
to target" approach which sets a percentile reduction on
a fixed historical baseline rather than on questionable and uncertain
emissions projections and we would encourage the review of the
scheme to take this into consideration.
— An EU wide cap—The case
for setting an EU wide cap should also be considered. Cap setting
at as aggregate a level as possible can best ensure efficiency,
transparency and fairness of process.
— Sector emissions reductions—Finally
and as indicated previously in this response we would recommend
that future caps should include significant emissions reductions
for all sectors (not just the power sector)—varying the
percentage cuts from different sectors depending on how exposed
they are to international competition and their abatement potential.
B. ALLOCATION
METHODOLOGY—RECOMMENDATIONS
— We would advocate that future allocations
for new and existing plant should be based on 100% auctioning.
As highlighted previously—all other allocation methodologies
that give allowances for free (grandfathering and benchmarking)
fail to provide the non-distorting incentives needed to drive
investment in cleaner technologies and fuels and actually encourage
industry to inflate their emissions projections in order to maximise
the number of free allowances they receive.
If a full auctioning system is not
accepted by phase III, then a two track approach could be applied:
— all allowances to the power sector
should be allocated by full auctioning by the beginning of 2012;
with allocation to other sectors being based on Best Available
Technology benchmarks; and
— the allocation to the other sectors
should rely on a phase-in of partial auctioning, eg 20% for the
third phase, 30% for the forth phase etc (with the rest of the
allocation based on BAT benchmarks).
Benefits of adopting auctioning include:
— consistentency with the "polluter
pays principle";
— simplification of the scheme. Auctioning
would remove the need for complex allocation methodologies and
rules to deal with new entrants, plant closures, rationalisation
etc;
— encouraging operators to consider
the cost of carbon upfront and assess their investments accordingly.
Interest from management level in the scheme would therefore likely
grow. If governments continue to allocate allowances for free
then it is likely that the operation of this scheme will, in some
sectors, remain the remit of the environmental manager who may
not have responsibility for making decisions on future investments/plant
operation;
— redress of windfall profits eg those
gained by the power sector; and
— the generation of revenue which could
be used to further develop and implement low carbon and energy
efficiency technologies; and potentially partially (if compatible
with state aid rules) be recycled back to those few industrial
sectors which are most exposed to international competition.
C. ACCESS TO
PROJECT CREDITS—RECOMMENDATIONS
— The limit on the use of project credits
should be based on a proportion of effort. This proportion of
effort should be considerably lower than 50% of the total effort
and the clause "supplemental to domestic action" should
be explicitly defined in the Directive.
— In addition the Directive should
be amended so as to only allow credits from Gold Standard certified
projects to be used to aid compliance with the scheme. Failing
that—credits from nuclear power and forestry sinks[16]
should continue to be excluded from the scheme and credits from
hydro projects must continue to be obliged to meet the World Commission
on Dams guidelines.
D. EXPANSION
General recommendations:
— As a general rule, the ETS should
be mainly focused on larger installations and large emission sources
(with the possible exception of aviation). However, we understand
that UK Ministers have written to the European Commission urging
the inclusion of surface transport in future phases of the ETS[17].
We urge caution in this approach until better understanding is
available of its practicality and its impacts on all sectors.
— In general, with the exception of
aviation we would suggest that the focus, for phase III, should
primarily be on refining the existing scheme. Beyond phase III—the
inclusion of other gases and sectors could be considered—but
the potential of reducing emissions by the inclusion of a sectors/gases
in the EU ETS should be compared to other policies and measures
to see which is the most environmentally and economically effective.
— We remain unconvinced by the arguments
for the inclusion of domestic offset projects. If there is large
greenhouse gas abatement potential in a sector then arguably it
should be governed by a separate policy and not be used to allow
emissions from the traded sector to grow.
We consider the following to be some of the key
principles for the inclusion of new sectors in an environmentally
effective way:
— large point source emitters—ensuring
enhancement of the liquidity and so efficiency of the scheme at
least implementation cost;
— sectors where emissions can be clearly
defined, monitored and reported;
— sectors where cost of expansion does
not outweigh abatement benefit;
— sectors should only be included where
other policies such as mandatory efficiency standards or taxation
are likely to be less effective in reducing emissions; and
— harmonisation of expansion across
the EU should be ensured.
Key concerns regarding the potential inclusion
of road transport
One suggestion is that if road transport were
to be included, initially the cap would be placed on the fuel
suppliers (due to the impracticality and cost of a downstream
approach which would place the cap on car owners). However, this
upstream approach also raises significant concerns such as:
— Ownership of emissions—the
fuel supplier does not own or have control over the emissions
and it is not clear how this upstream approach would influence
the behaviour of the downstream users eg drivers and manufacturers;
— Market distortions and price impacts—it
is extremely likely that, in the short term at least, that road
transport would be a net buyer of emissions credits from other
sectors—rather than reducing its own emissions. There is
a concern, therefore, that a weak cap would be set initially to
ensure that there were sufficient allowances to cover emissions
from this sector. If a tighter cap were set on this sector this
would likely create an upward pressure on prices which might well
lead to weaker caps being set for other sectors in order to compensate
for this—leading to very little actual abatement taking
place as a result of the scheme overall.
— Other measures—as with
the inclusion of aviation there is a risk that the inclusion of
road transport into the ETS might be used as an excuse not to
impose any stronger/more effective measures such as mandatory
fuel efficiency standards or taxes that would better directly
address emissions from this sector or to delay the implementation
of these.
E. INVESTOR PREDICTABILITY
AND INCENTIVISING
LOW-CARBON
INVESTMENT POST
2012—RECOMMENDATIONS
The ETS should be a critical tool in helping
the EU achieve emissions reductions targets post 2012. It should
also provide a blueprint for similar schemes throughout the world.
However, key to the success of the scheme is that it encourages
increased investment in low emission or emissions reduction technologies.
We consider the following elements to be key
to incentivising such investment:
— in advance of an agreement being
in place on post 2012 global emissions reduction targets the European
Commission and European Council must send a clear signal that
the ETS and hence the carbon market will exist far beyond 2012;
— strong early signals on medium and
longer term emissions reduction targets for sectors under the
ETS should be provided by the EC and Member State governments.
This could follow from the establishment of an annual Carbon Budget
(at the EU or member state level) which sets year on year emissions
reduction targets;
— longer phases should be considered
in order to tie in with industry investment cycles; and
— there should be more auctioning in
future phases. If all installations had to pay for their allowances
up front then there would be a clear incentive to reduce emissions
so that fewer allowances would need to be bought.
In addition, and importantly, in the absence
of an international agreement that puts in place a global carbon
price consideration needs to be given now on how to protect the
strategic competitiveness of investments in Europe post 2012,
over longer periods and under higher carbon prices. Some of the
options available to do this are outlined in the recent Carbon
Trust report[18].
We would recommend that options to address this are fully considered
in the review.
4. RECOMMENDATIONS
REGARDING THE
INCLUSION OF
AVIATION
How should aviation be included in the ETS? What
are the latest indications of when it will be included?
As the fastest growing source of greenhouse
gas emissions the lack of political action on aviation can no
longer be justified. It was therefore a welcome move, when in
September 2005 the European Commission outlined their intention
to bring forward a legislative proposal to include the climate
impact of the aviation sector in the EU Emissions Trading Scheme[19].
This is due by the end of 2006 and will be taken into consideration
during the general review of the ETS—now expected to commence
in October 2006.
Provided the system is designed in the ways
in which we suggest in this document we would consider the inclusion
of aviation into a Europe wide Emissions Trading Scheme to be
an adequate first step in starting to address the climate change
impacts of this sector. However, on its own the scheme is unlikely
to deliver, at least in the short term, significant emissions
reductions from aviation. Indeed, the Commission's communication
recognises the need, that, in parallel to the consideration of
including aviation into the ETS that existing policies and actions
should continue to be strengthened.
We would emphasise, therefore, that inclusion
of aviation in the ETS should be developed, not in isolation,
but as part of a complementary package of policies and measures
eg NOx en-route charging etc. As it is unlikely that aviation
will actually enter into the scheme before 2009-10 at the earliest
(due to the two to three years it may well take for the legislative
proposal to pass through the European Parliament and Council co-decision
process) we would like to see these additional measures implemented
at the earliest opportunity and certainly before 2010.
Key design features are as follows:
— Geographic scope—this
should cover all international flights (from and to EU airports)—not
just flights between EU destinations which account for just 40%[20]
of the total emissions from aviation in the EU. This is important
not just for an effective emissions trading scheme but also for
other policies and measures which could seek to address the climate
impacts of aviation.
— Coverage of climate impacts—the
climate impacts of aviation are two to four times higher than
the impact of CO2 alone (excluding the potential effects
of enhanced cirrus cloud formation) and flanking instruments (eg
NOx en-route charging) to address these impacts should also be
introduced as soon as possible.
— Cap—The sector should
be given a cap which will deliver an absolute reduction in emissions
from a fixed historical baseline. Due to the international/cross
national boundary nature of the aviation sector it would be sensible
for the cap to be set at the EU level and not by individual member
states participating in the scheme, and for the same rules to
be applied to allowance distribution across the sector. Cap setting
at as aggregate a level as possible can best ensure efficiency,
transparency and fairness of the process. Such harmonisation of
allocation would also prevent competitive distortions which may
occur if member states set differing cap levels, and may also
reduce the administrative costs related to allocation decisions
to member states.
— Allocation methodology—The
aviation sector should be required to buy 100% of its allowances
at auction. All other allocation methodologies that give allowances
for free (grandfathering and benchmarking) fail to provide the
non-distorting incentives needed to drive emissions down or encourage
investment in cleaner technologies and fuels and are likely to
generate huge windfall profits for the sector (eg potentially
in the magnitude of billions of Euros per year, assuming an EUA
price of between 10 and 30 Euros per tonne of CO2,
the sector were to receive all of its allowances for free and
were to pass on the opportunity cost of allowances to the ticket
price22). Auctioning also supports the "polluter pays"
principle, rewards good performance and generates revenue.
— Closed vs open scheme—from
an environmental point of view and prior to the inclusion of aviation
into a post 2012 agreement our preference would be for a separate
closed scheme where companies could trade with each other and
have limited access to project credits. A separate pilot scheme
dedicated to the aviation sector would trigger reduction measures
in this sector while avoiding Kyoto allowances—eg the allowances
derived from legal Kyoto implementation policy—being mixed
with allowances from a non-Kyoto sector such as aviation.
As argued for in its February 2005 communication23
we agree with the Commission that the international post-2012
climate change commitment should include emissions reductions
commitments from international aviation. If aviation were included
it could then potentially be incorporated into the wider EU ETS.
However we would support the European Parliament's proposal24
which states "Any arrangement by which aviation was incorporated
into a wider ETS would need to take account of the sector's sheltered
status and apply appropriate conditions eg a cap on the number
of emissions rights the aviation sector could buy from the market
(to avoid market distortion against less protected areas), and
a requirement that aviation make a proportion of the necessary
reductions before being allowed to buy permits."
— Use of project credits—The
aviation sector should only be allowed to buy credits from Gold
Standard certified projects to aid compliance with the scheme.
Failing that—credits from nuclear power and forestry sinks
should be excluded from the scheme and credits from hydro projects
must be obliged to meet the World Commission on Dams guidelines
as is the case in the existing ETS Directive. The limit on the
use of project credits should be based on a proportion of effort.
This proportion of effort should be considerably lower than 50%
of the total effort and the clause "supplemental to domestic
action" should be explicitly defined in the Directive.
October 2006
22 "Giving wings to emissions trading, inclusion
of aviation under the European emission trading system (ETS):
design and impacts" CE Delft 2005. Report for the EC, DG
Environment.
23 (COM(2005) 35, 9.2.2005.
24 "Report on reducing the climate change
impact of aviation (2005/2249(INI)) " A6-0201/2006, European
Parliament report.
7 "EU Emissions Trading Scheme-UK Phase II
National Allocation Plan, August 2006" Defra (August
2006) http://www.defra.gov.uk/environment/climatechange/trading/eu/phaseII-nap.pdf Back
8
The use of emissions trading means that you cannot guarantee that
reductions will happen within the UK. WWF is prepared to accept
this provided the system as a whole-the collective NAPs (including
the level of the cap, access to project credits etc.)-is robust
and does actually lead to significant emissions reductions. Back
9
"Allocation and competitiveness in the EU Emissions Trading
Scheme-options for phase II and beyond" The Carbon Trust
(June 2006). Back
10
Note that not all of these NAPs have been notified to the Commission. Back
11
"EU Emissions Trading Scheme phase II-overall partial
RIA" Defra (August 2005) http://www.defra.gov.uk/corporate/consult/euets-phasetwo-nap/ria-overarching.pdf Back
12
"The European Emissions Trading Scheme-implications for
industrial competitiveness" The Carbon Trust (2004) http://www.carbontrust.co.uk/Publications/publicationdetail.htm?productid=CT-2004-04&metaNoCache=1 Back
13
"Emissions Trading-impacts on electricity consumers"
OFGEM (February 2005) http://www.ofgem.gov.uk/temp/ofgem/cache/cmsattach/11936-SummaryETSdiscussion.pdf Back
14
"Allocation and competitiveness in the EU Emissions Trading
Scheme-options for phase II and beyond" The Carbon Trust
(June 2006). Back
15
see http://www.cdmgoldstandard.org Back
16
Examples of why we do not support forestry sink projects are as
follows: although trees absorb CO2 whilst they are
living, it cannot be guaranteed that a new forest will be permanent.
It is eventually likely to succumb to disease, fire, or logging-releasing
the CO2 into the atmosphere once again; depending on
the method used to calculate the amount of CO2 stored-whether
other pools of carbon in the forest are taken into account (e.g.
soil, leaf litter), and other factors-estimations of the amount
of CO2 that a forest can absorb can differ vastly;
large-scale monoculture tree plantations often have negative impacts
on the environment and forest communities; and buying credits
from forestry projects does nothing to lessen society's dependence
on fossil fuels to generate its energy-something that is ultimately
needed to address climate change. Back
17
"Surface Transport and CO2 Emissions Trading",
Letter from Darling, A, Beckett M and Johnson A written to Stavros
Dimas, EU Commissioner for the Environment. London: House of Commons
Library (2006). Back
18
"Allocation and competitiveness in the EU Emissions Trading
Scheme-options for phase II and beyond" The Carbon Trust
(2006). Back
19
COM(2005) 459, 27.9.2005 Reducing the Climate Change Impact of
Aviation. Back
20
Estimates of CO2 emissions from Eurocontrol. 2004 estimates
indicate that intra-EU flights emitted around 52 MtCO2
while all departing flights emitted 130 MtCO2. Back
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