Think Global – Act European IV
SAVING EMISSIONS TRADING FROM IRRELEVANCE Stephen Tindale | Associate Fellow, Centre for European Reform (CER)
Summary Uncontrolled climate change is the greatest risk that humanity faces. The main burden will fall on developing countries, particularly in sub-Saharan Africa. But Europe and its residents will also be damaged in many ways, including extreme weather, heat waves, and the spread of tropical diseases. Climate change is a quintessentially global challenge. If pollution shifts from one part of the world to another – from Europe to China, for example – the global climate is no better off. The main EU climate policy, the Emissions Trading System, now stipulates such a low carbon price that it has become essentially irrelevant. The European Commission should propose a Europe-wide carbon price floor of €30 per tonne, high enough to influence investment decisions and encourage energy efficiency and low-carbon energy supply. The Commission should also propose border tax adjustments, with the revenue returned to the country of origin.
Introduction The Durban Climate Change Conference set a timetable for agreeing new targets on greenhouse gas reductions. This was better than nothing – but not much. There is little prospect for significant global agreement on climate change. So the EU should focus on its internal climate policy. Uncontrolled climate change is the greatest risk that humanity faces. A report commissioned by 20 governments and published in September 2012 estimates that it is already killing nearly 400,000 people each year. In addition to the 130