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Currently showing: Climate/natural disasters > Climate change

05 May 13 19:52

For more than 10 years I've been working for business addressing the climate change challenge. In many ways this has been an encouraging time till lately, demonstrating enhanced concern and will to combat climate change.

However, the current economic crisis have changed this, lately demonstrated by the European Parliament's decision not to support a strengthening of the EU carbon price.

Continuous undermining of the legal instruments, including carbon pricing, is the biggest risk we are facing in the combat against climate change. Business must encourage politicians to maintain focus on climate change, incentivising low-carbon investments.

Category: Climate/natural disasters: Climate change

Location: Europe


markdway - 6 May 2013, 2:24 p.m.

Agree. It's the wrong time to fall back on short-term thinking and the EU should strengthen its pioneering EUETS rather than accept it becoming effectively irrelevant due to a carbon price that is ridiculously low. However, maybe they will have another chance to put things right and remove some of the excess capacity from the market.

Alicia Montoya - 6 May 2013, 4:03 p.m.

My question is what do you think is most effective, especially given the financial situation we find ourselves in: solutions at local level (e.g. California) or to continue to try build consensus EU/worldwide? More on that in today's Washington Post:

Helle Juhler-Verdoner - 6 May 2013, 8:11 p.m.

I hope you're right, and hopefully some of the pilot developments in China and elsewhere will pave the way for politicians in favour of this development, some time in a not too distant future.

Helle Juhler-Verdoner - 6 May 2013, 8:38 p.m.

I strongly support putting a price on carbon as the most efficient way of incentivising low carbon investments. For this to happen the development most be bottom-up / regional, so not world wide but EU, Australia, California etc. have come very far in their developments and may eventually be able to link their carbon systems. The global CDM mechanism remains an important tool for this to happen. However, the lack of will to ensure a sufficient price incentive is worrying. And since we are facing low prices and lack of political support, I believe we need to pursue other regulatory / support policies such as local or regional support for renewable energy technologies, e.g. share of renewable energy technologies as part of total power generation. These are second best solutions and should be pursued to incentivise investments in clean technology developments while the world and in particular the EU and the USA overcome the financial crises situation.

Aleks Jovanovic - 7 May 2013, 3:42 p.m.

The future of EU Emissions Trading System (EU-ETS) looks bleak but there is hope: backloading amendment is going to return to "second round" as proved today in joint statement of 9 EU ministers of environment who expressed their wish to reform the (ETS), including the decision on "backloading" as a short term fix for carbon price.
It is important to note that this joint action came as a result of European Parliament's vote from 16th April which sparked disappointment and urged warnings from carbon analysts stating that any inaction could mean the price of carbon in Europe will be inching ever closer to zero. The ministers are deeply concerned that currently designed ETS cannot provide the price signals necessary to stimulate low carbon investment beyond 2020 and that through proper structural reform can EU ETS be restored to drive down carbon emissions.

Juerg Trueb - 8 May 2013, 1:11 p.m.

Agree that climate change needs to be addressed. Carbon markets are one instrument to do so and EU-ETS was needed. However, the way it developed I don't consider it a successful experiment. Mainly because political decision making affected carbon pricing in such a way that market was not sustainable let alone did lend itself as the role model for a global carbon emissions market. Regional markets hopefully allow for a joint learning but at one stage will need to end in a global deal. In the mean time other policy measures should be developed/existing regulation (e.g. fossil fuel subsides) should be reviewed/revised. Most importantly however, to allow for sustainable development (remember that access to energy is linked with prosperity), business needs a stable and predictable regulatory framework.

Alicia Montoya - 20 May 2013, 8:25 a.m.

Well, here's some good news from the US:

What do you make of Moniz' appointment and do you think this means he will finally lead the way for a US price on carbon?

markdway - 23 May 2013, 3:01 p.m.

Cap and trade is dead in the US but there is a (smallish) chance of a carbon tax (fee) being introduced as part of a comprehensive tax reform bill if one gets introduced. A tax would need to be revenue-neutral with proceeds being use to, for example, to reduce corporate tax (high in the US) or payroll tax. It could also be used to reduce the national debt or, even, invest in resilience measures to reduce the impacts of severe weather (now there's an idea!). This is likely the best chance there is of putting a direct price on carbon emissions in the US through legislative means right now .

markdway - 23 May 2013, 4:10 p.m.

Having said cap and trade is dead in the US - that's only true for the the debate in Congress. California is steaming ahead. Let's hope it is a big success there and a potential model for the federal level (if carbon tax doesn't get there first!).:

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