Carbon Market Watch

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Open letter to Members of the Development Committee of the European Parliament on the revision of the EU ETS

22 Jun 2016

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Dear Members of the European Parliament’s Development Committee,

We, the undersigned, representing 60 networks and organizations from 23 countries, call on you to adopt an ambitious opinion on the revision of the European Union Emission Trading System (EU ETS), that will reflect the importance of taking into account the perspective of most vulnerable countries to climate change.

Despite its climate leadership, the EU is still the third biggest polluter after China and the US[1]. Taken together with the historical cumulative emissions since the industrial revolution, European countries are amongst those most responsible for causing climate change. Even as climate impacts are unravelling today in many European countries, like the flash floods in France and Germany, this is still nothing compared to the devastation which developing countries are witnessing. The rise of global temperatures drives hunger and destruction in developing and poorer countries, for example through the climate supercharged El Niño which is already putting more than 60 million people at risk of food insecurity.

The revision of the EU ETS, considered to be the flagship tool of Europe’s climate policy, is currently being discussed. Due to its prominent role in the EU fight against climate change, and because of the impacts European climate policies have on the Global South, the EU ETS revision should also take into account the perspective of developing countries. Consequently, we, the undersigned organisations, call on you to adopt an opinion that calls for:

  • More ambition: the Commission’s proposal is not in line with the new 1.5 goal of the Paris climate agreement. The United Nations United Nations Framework Convention on Climate Change (UNFCCC) secretariat has just warned that if countries do not urgently increase their Intended Nationally Determined Contributions offers, we will already have lost our chance to stay below 1.5 degrees in 2025. If the EU does not revise its climate ambition before 2020, it will betray the High Ambition Coalition in which it stood by many of the poorest and most vulnerable countries. We call on you to support all amendments which strengthen the EU’s climate ambition in line with the 1.5 degree goal, limit free allocation to industry and ensure ambition can be further increased after 5 years.
  • Making the EU ETS a source of international climate finance: the revision of the EU ETS offers a unique opportunity to increase transparency and predictability of climate finance from the EU and its Member States by establishing a mechanism that directs a portion of the ETS revenues to international climate finance[2]. EU member states already agreed to fund industrial innovation and the modernisation of energy systems in poorer European countries through the EU ETS, they should also set up an International Climate Action Fund to support the people who are really most impacted, via the Green Climate Fund or other bi- or multilateral partners of the EU and its Member States in implementing their commitments under the UNFCCC.
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  • Fixing the current approach for biomass: The ETS currently wrongly assumes that the burning of biomass is carbon neutral. This is based on the assumption that emissions from changing carbon stocks are accounted for in the land-use sector (LULUCF). Yet, as most biomass production lacks any kind of sustainability criteria and as land-use accounting is incomplete, this assumption is wrong. The absence of sustainability criteria threatens forests and forest dependent people globally. The zero rating of carbon emissions from biomass needs to be fixed.

We hope that you will be able to support these points in the upcoming DEVE opinion on the EU ETS revision.

Yours Sincerely,

List of organisations supporting, by country (please scroll down to the end of the document).

[1] The EU 28 contributed 10,16% to global emission in 2012 according to WRI CAIT Climate Data Explorer- http://www.wri.org/blog/2015/06/infographic-what-do-your-countrys-emissions-look

[2] See Oxfam’s briefing on an EU ETS International Climate Action Reserve. There is growing support for this approach, including in the position of the European Parliament for COP21, in a briefing paper by the Bruegel thinktank  for the Informal ECOFIN Ministerial Meeting on 11 September 2015, as well as in the Report of the Canfin-Grandjean Commission on mobilising climate finance.

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