Brussels, 27/07/2012 (Agence Europe) - The proposal for the short-term reform of the EU's greenhouse gas emissions trading system (ETS) presented by the European Commission on Wednesday 25 July as a first step in trying to increase the price of carbon has left some in industry unhappy. Unlike the environmentalist NGOs, for which the proposal is not far-reaching enough (see EUROPE 10663), the Austrian Chamber of Commerce and Industry (WKÖ) lambasts the Commission's interventionist approach to the market and argues that this would be the wrong measure at the wrong time.
“The CO2 market must remain a market instrument. The price of permits must be determined by the laws of supply and demand. The banner of climate change must become the toy of a short-sighted policy”, stated Stephan Schwarzer, head of WKÖ's Environment and Energy Policy department, persuaded that, with this first step, the Commission is leaving the door wide open to future arbitrary intervention in the ETS.
The WKÖ is of the view that, over the last few months, the Commission has been playing a strange game, creating uncertainty for industry over the over the future regulatory framework and that, after trying unsuccessfully to raise the EU's climate change objective (reducing emissions by 30% rather than 20% by 2020), the Commission is now seizing upon the fall in prices. “This breeds huge insecurity among investors as the ETS rules for the 2013-2020 period were agreed with the adoption of the climate/energy package in 2009. No one can plan their investments on the basis of ad hoc decisions such as the one that has just been announced, immediately before 2013” (the date on which the third phase of the ETS begins: Ed.), Schwarzer argues.
The move comes at a particularly inopportune moment as, if it is approved, the price of CO2 will be artificially inflated, making the task of those companies which want to produce goods in the EU that bit more difficult since the predictability of the trading scheme will have been totally lost, WKÖ says. “At a time when the economic temperature is going down rather than up and when the sovereign debt crisis is casting a dark shadow over the economy, European industry really does not need to be faced with further burdens.”
It is a fact that the price of CO2 has fallen, affected by the crisis. From an economic point of view, it has to be said that the ETS makes a significant contribution to reducing CO2 emissions, WKÖ notes, arguing that such measures must always allow better results to be achieved at the lowest possible cost. It hammered the point home: “That, in this respect, the economy has been successful should not lead to its being penalised, damaging employment and industry in Europe and Austria”. (AN/transl.rt)