The European Parliament may be about to remove one of the cornerstones of the European Union’s climate policy when it votes on Climate Commissioner Connie Hedegaard’s proposals for a revamped quota trading regime tomorrow.
It remains unclear whether Hedegaard can muster a majority for the proposal.
“Irrespective of the result, it will be a very close vote. And there is a lot at stake. Basically on whether an ailing patient can survive or not. There is a need to intervene and remedy, otherwise the quota regime is basically out of the game,” Hedegaard tells Berlingske.
The quota trading regime determines how much a company must pay to emit a tonne of CO2 – and is an incentive to pollute less and introduce green investments.
But the price per tonne is less than EUR 5 – far from the EUR 25-30 target – and has thus little effect.
As a result, the Commission wants to increase prices by reducing the number of CO2 quotas available by withdrawing 900 million quotas from the market between 2013 and 2015.
Uncertainty in the Parliamentary vote comes after the proposal was voted down in the Energy Committee, while the Environment Committee voted in favour.
Today’s Financial Times sports an advertisement signed by Danfoss, DONG Energy and several other European companies, calling on Parliament to vote in favour of the proposal. Business Europe, however, which is an umbrella organisation for 41 central industrial and employers’ federations from 35 countries, is against the proposal.
“They have sent a letter to all MEPs in which they write that this will lead to increased costs and that they should therefore vote against,” Hedegaard tells Berlingske.
“But there is little point in saying: ‘Give us the lowest possible costs as we are in the midst of a crisis’. Let me remind everyone that when the quotas were agreed, the forecast average price was EUR30. Today, the price is EUR4. So don’t come and tell us that the CO2 price hasn’t been factored into the crisis. It certainly has,” she tells Berlingske.
Business Europe also represents the Danish Confederation of Industries where the Climate and Energy Policy Executive Troels Ranis says the proposal would be a burden for companies.
It will, he tells Berlingske, mean an extra cost of DKK 300 million, which will have its effect on employment.
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Edited by Julian Isherwood