Outline of Comments
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Transcript of Outline of Comments
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Uncertainty about Emission Rights and Energy Prices
- and Impact on Economic Growth
Thomas L. BrewerAssociate Professor, Georgetown University,
Washington DCand
Associate Fellow, Centre for European Policy Studies, Brussels
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Outline of Comments
Uncertainty and Transparency Issues about the Emissions Trading Scheme
Three Episodes
Current Situation
Offsetting Border Measures to Address Energy Price and Competitiveness Issues
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Three Episodes of Regulatory Uncertainty and Their Effects
on EUA Prices
• Spring 2004
• Spring 2006
• Autumn 2006
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EUA Prices:February 2003-June 2004
(From Point Carbon – used with permission)
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Price developments on the EU market: Nov. 05 – Oct. 06
29.20
30,40
9.25
8.95
12.50
21.65
15.05
32.85
17.9020,25
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01/1
1/20
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14/1
1/20
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25/1
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08/1
2/20
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21/1
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04/0
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17/0
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30/0
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10/0
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23/0
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26/0
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08/0
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28/0
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05/0
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18/0
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29/0
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12/1
0/20
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Pri
ce [
€/to
n]
Spot 2006 2007 2008
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Current Situation:Commission Decision of 29 November
• 10 proposed NAPs rejected by the Commission (including Sweden, Germany and UK)
• 6 not yet submitted (Austria, Czech Rep., Denmark, Hungary, Italy, Spain)
• 9 pending
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Specifics of Rejections
Germany: Reduce total from 482 mmt to 453.1 mmtInclude new power plants
UK: Inadequate list of plantsTotal allocations okay (246.2 mmt)
Sweden: Next slide
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Criteria Contravened by Swedish Plan
2. Allowances consistent with actual and projected progress toward fulfilling contribution to Community’s commitments in Decision 93/389/EEC
3. Allowances consistent with potential to reduce emissions
10. List of installations covered with quantities of allowances to be allocated to each one
12. JI/CDM limit: maximum percentage of total allowances to be CERs and ERUs
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Uncertainty
and/or
Transparency
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Transparency
Uncertainty
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Inevitable Uncertainty
and
Controllable Transparency
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Uncertainty Issues More Generally
Four Levels
1. Terms and implementation of members’ National Allocation Plans (NAPs)
2. Future EU allocation and other rules
3. Industry coverage
4. International interactions of ETS with other climate regulatory regimes …
and the trade regime
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International Competitiveness
Off-setting border measures on imports from ‘cheap energy’ non-Kyoto countries?
• EU Parliament resolution
• Commission position
• French government recent statement
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For further information…
“Business Perspectives on the EU Emissions Trading Scheme,” Climate Policy, 5 (2005): 137-144
“The WTO and the Kyoto Protocol: Interaction Issues,” Climate Policy, 4 (2004): 3-12
www.usclimatechange.com