A clever scheme poorly executed
To constrain the emission of greenhouse gasses, the European Union decided to issue so-called 'emission permits' or 'carbon credits' among European businesses in 2005. One carbon credit allows the buyer to produce 1 tonne of CO2 emissions. If a business wishes to emit more emissions than it is entitled to because of its permits, it must buy additional carbon credits. Unfortunately, the system doesn't function as it was intended. There are too many emission permits on the market. Due to the surplus, the financial incentive for investing in cleaner production remains absent. As a result, the major polluters keep on burning fossil fuel as if nothing happened. Annually governments reduce the number of emission permits that are issued. This however goes way too slow. And that's an opinion we share with many scientists.
As an individual you can buy carbon credits yourself, reducing the emissions available for Europe’s biggest polluters and send an important political signal. You invest in the EU’s Emissions Trading System; therefore, you are entitled to demand that the system indeed brings down greenhouse gas emissions.
Politicians should realise they cannot just sit back and watch, work needs to be done in order to make sure Europe’s key climate tool is going to function properly.
Together we can change the system!
These are our main goals:
- Reduce the number of CO2 permits in circulation.
- Increase the price of CO2 permits in the EU ETS.
- End all free allocation to the industry
- Ensure national governments spend all ETS revenues on real climate action.
By purchasing CO2 permits and destroying them, you are showing that you care about fair pricing of CO2. Carbonkiller can use this in the debate on the review of the EU ETS. These are our main asks to the Dutch and European government:
The Netherlands can improve the ETS by:
- Cancelling permits when the production capacity of renewable energy increases to avoid a further increase in the oversupply of permits.
- Closing coal-fired power stations in an accelerated pace and cancelling the corresponding permits to offset the indirect waterbed effects.
- Earmarking EU ETS revenues and spending them on real climate action. More ETS revenues should lead to higher climate funds.
- Stop the subsidy for industries in the form of 'indirect cost compensation'. At the moment, citizens are charged ETS energy prices, while polluting companies received compensations.
The EU can improve the ETS by improving the ETS proposal in the following areas:
- Face out free allocation for industries much sooner than 2035.
- Better define how ETS revenues should be spend, using the 'do not significant harm principle'.
- Increase the ambition of the reduction targets, and improve the mechanisms that can achieve that such as the Market stability reserve and the benchmarks for free rights.