A leaked European Commission document suggests that pollution subsidies to industry under the EU’s Emissions Trading Scheme will increase to around €150 billion after 2020. The subsidy is under consideration because some industry sectors claim that the EU’s carbon market puts them at a competitive disadvantage, when in fact carbon pricing has been successfully introduced in many other regions as well. The proposal to shield industry from Europe’s main climate instrument sends the wrong signal ahead of the climate summit in Paris in December where countries are expected to sign a global climate agreement applying to all sectors and regions.
Barro Blanco – a CDM approved hydro dam in Panama – has entered in its most critical phase, following back pedaling from the government of Panama and threats by European lenders. Indigenous people set a deadline for the project to be cancelled.
Currently, parties to the UNFCCC are meeting in Bonn for a new round of climate negotiations. One of the topics that is on the table is the review of the Modalities and Procedures of the Clean Development Mechanism (CDM). Parties are thereby discussing rather “light” issues and shy away from more conflicting topics. But, when turning a blind eye on the necessity for more controversial themes, such as the establishment of a grievance mechanism, the review of the Modalities and Procedures may fall behind its great potential to improve the CDM for the future.
With another round of UN climate talks underway in Bonn, uncertainty remains over the role that carbon markets will play in the Paris Protocol and accompanying decisions.