Emissions trading moves higher up EU and UK agenda following Stern Review
Wed 11 October 2006
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The European Commission has promised legislative proposals to include air transport in the EU Emissions Trading Scheme (ETS) from 2010. Following the publication of the Stern Review, the UK Government has also reiterated its intention to expand the scope of emissions trading.
The EU Environment Commissioner Stavros Dimas has promised that legislative proposals for the aviation sector, to be published soon, would cover all flights entering and leaving EU territory.
ENDS also reports that a major expansion in emissions trading in the UK could mean that as many as 5,000 large British companies and public sector organisations could be subject to a new scheme. Unlike under the EU ETS, proceeds would be redistributed to participants for investments in energy efficiency.
Organisations including supermarkets, hotel chains, rail operators, central government departments, universities and large local authorities would be captured under the proposal. The Government has suggested that the threshold for inclusion should be organisations with annual energy bills over £250,000. This would mean that about 10% of total UK CO2 emissions would be captured under the scheme.
Meanwhile, the UK Government has published its future vision for emissions trading. In a joint communication from Defra, DTI and HM Treasury, published on the Treasury website, the Government cites the Stern Review in signalling the need for the introduction of carbon price signals across countries and sectors to ensure that emission reductions are delivered in the most cost effective
way. The communication says that tax, trading and regulation can all be used to create a price for carbon.
The Government favours an international carbon trading system which keeps emissions within limits whilst allowing emission reductions to be made at least cost through the trading of allowances. The document states: "This is the UK’s carbon price instrument of choice and a key component in a comprehensive UK policy framework to effectively mitigate climate change."
Related Links
UK Government vision on emissions trading
EU emissions trading website
ENDS Daily news link
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