EU carbon market unfit to handle coal phase-out
A week of climate mobilisations is coming to its end. Ahead of the UN climate summit in New York last Monday, four million people across the globe took to the streets on Friday 20 September to demand that their governments take urgent action to solve the climate crisis. So far, our leaders are failing to live up to citizens’ expectations. Can they really afford to disappoint? We don’t think so.
Our latest briefing shows that the planned coal phase-outs in Europe – an urgent task to pursue across the world – could lead to a flood of surplus pollution permits on the EU carbon market that would be likely to crash the prices. To prevent this, national governments must cancel unused pollution permits when coal plants close down. At the EU level, it is paramount to strengthen the market stability reserve which absorbs surplus off the market.
Meanwhile in Montreal, the global deal to address carbon emissions from flying – CORSIA – is high on the agenda at the UN aviation body’s triennial assembly. The only global sector without an official climate target, ICAO needs to urgently adopt a long-term climate strategy. While airlines are pushing to have the weak offsetting scheme CORSIA as the only measure to regulate aviation emissions, the EU must protect its sovereignty and take stronger action on this massive climate problem.
Finally, a new report by the High-Level Commission on Carbon Pricing and Competitiveness finds that coupled with other policies such as increased investment in low-carbon technologies, carbon pricing can boost new industries and advance innovation in existing ones. The report adds to the mounting evidence that even heavy industry can decarbonise and remain competitive.
on behalf of the Carbon Market Watch team,
- Over 2 billion surplus pollution permits could flood Europe’s carbon market by 2030
- Climate strikes: people do not want to be left behind, and governments should listen to them
- Aviation needs a credible long-term climate strategy
- Pricing pollution can drive green growth – new report busts industry competitiveness myths
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