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May newsletter editorial: Revamping carbon market can help wean EU off fossil fuels

EP Plenary session – Key debate – The social and economic consequences for the EU of the Russian war in Ukraine – reinforcing the EU’s capacity to act © European Union 2022 – Source : EP

Slovakia’s Deputy Prime Minister Richard Sulík has a surreal idea for emptying Vladimir Putin’s war chest. “We should lower energy prices… We should suspend CO2 trading, because that drives up energy prices,” he opined in a 5 May interview on the EU’s oil embargo on Russia with German public broadcaster Deutschlandfunk. 

Moreover, the centre-right politician whose country receives Russian oil via pipeline (and hence barters for a transition phase for the embargo until 2025), believes that the EU “wants to pursue too many goals at the same time”, arguing that the climate and other related policy goals should be sidelined in order to focus on stopping the war in Ukraine.

This sideswipe is just one minor example of the unhelpful points of view that are proliferating as the EU works to hammer out legislation that ought to realise the implementation of Europe’s climate ambition.

Sulík is an economist, yet he doesn’t seem to grasp the reality that the EU’s carbon price represents only a tiny fraction of our current energy prices. More importantly, he seems to fail to understand that our addiction to fossil fuels fans the flames of conflict in Ukraine and elsewhere. Ending the war in any sustainable way requires us to wean ourselves off fossil fuels, not prolong our addiction, as he suggests.

The deputy head of a country who thinks that we still have the choice of deprioritising climate action in the face of war in our neighbourhood is not short of knowledge but, rather, lacks the true insight that the future of our civilisation hinges on our grasping every opportunity to tackle our interconnected human and planetary challenges.

India and Pakistan are currently living through the horror of a heatwave with temperatures approaching 50°C. This is Kim Stanley Robertson’s clifiction novel The Ministry for the Future come true. The novel shows that distant human disasters are likely to have global political repercussions, and yet, because in Brussels and Bratislava, our bodies do not yet sizzle when we go outdoors, we are not awake enough to the reality that the planet as a whole is cooking, and our media headlines don’t feature it much these days.

Russia’s war on Ukraine, with the challenge it poses for European energy supplies, only reaffirms the previous climate policy prescriptions: reduce energy consumption, switch to renewables, exit polluting production modes. The war on Ukraine is no legitimate justification to thwart the efforts underway to strengthen key EU climate policy instuments, such as the European Emissions Trading System.

Climate climax

The EU ETS review is a make or break decision for the climate, as we will discuss during our second Carbon Pricing Hub, which will take place ahead of the committee and plenary votes at the European Parliament. More ambition needs to be injected into the EU ETS, as research we commissioned and which we will present at the event clearly reveals. All climate pledges and promises made by governments globally so far will lead us to overshoot significantly the planetary heating target of 1.5°C.  The EU’s plan to reduce net emissions by 55% by 2030 is not enough. Whether measured by our oversized carbon footprint, our historical responsibility, or our capacity to act, multiple independent assessments call upon the EU to increase its target to well beyond 60%. Heavy industry and sectors not yet covered by the EU ETS, must contribute substantial reductions to such an enhanced goal.  

At the event, there will be a debate between the socialist and green ETS shadow rapporteurs and  civil society experts who agree on this principle of reform. Their differences of opinion lie in the best way to do this with the mechanisms contained within the current system and whether to expand it. Their joint challenge is how to fend off those who disagree with the premise. This is what we will tackle in the debate.

Another important advocacy effort we were recently involved in was the open letter we sent to the European Parliament’s Environment Committee urging MEPs to vote for an EU ETS that works for both the climate and the industrial transformation. Signed by some 30 NGOs think tanks, and progressive companies, the letter homes in on the need to phase out the free allocation of pollution permits, to reinvest auctioning revenues to support the green transition, and to ensure that if the Carbon Border Adjustment Mechanism is introduced, it is truly as an alternative to free allocations. Ideally, a strengthened EU ETS will be embedded in a comprehensive and holistic industrial policy framework mixing incentives for changing polluting practices with exacting production standards and product requirements. 

Please support all efforts to secure an ambitious outcome on the EU ETS and other EU climate legislation as if your life depended on it – because it does, or at least that of your descendants. Thank you.

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