Achieving 1.5°C warming goal requires rapid reform of EU carbon market

(EurActiv, 15 Jan 2020) To deliver quick results, the European Commission should focus on two measures when revising the EU Emissions Trading Scheme: strengthening the cap and enhancing the Market Stability Reserve (MSR), write Mari Pantsar and Outi Haanperä.

Mari Pantsar is the director for carbon-neutral circular economy at Sitra, the Finnish Innovation Fund. Outi Haanperä is a leading specialist at Sitra.

The new President of the European Commission, Ursula von den Leyen, pledged to increase the EU’s 2030 emission reduction target from 40% to at least 50% from 1990 levels, with the possibility to push this to 55%.

More information about the targets, and the measures to achieve them, were outlined in the European Green New Deal communication in December.

We all know the coming decade is crucial in the fight against global warming. European Union leaders, with the exception of Poland, have agreed a ‘net-zero’ greenhouse gas emissions target by 2050 at their December summit. Updating the EU 2030 climate target is a logical consequence and doing so would meet the request by the international community to update the Nationally Determined Contributions (NDC) by 2020.

The current pledges under the Paris Agreement are not compatible with the 1.5-degree warming target and therefore all parties to the Agreement, including the EU, need to increase their emission reduction efforts.

Any plan to increase EU climate ambition shifts the focus to the EU Emission Trading Scheme (EU ETS). Although the system has effectively reduced emissions – under the stationary ETS, emissions decreased by 29% since 2005 compared to a 10% decrease in sectors covered by the Effort Sharing Regulation (ESR) – the system still dramatically falls short of its potential to help the EU meet its Paris climate targets.

The big question is how to Paris-proof the EU ETS.

External link

EurActiv, 15 Jan 2020: Achieving 1.5°C warming goal requires rapid reform of EU carbon market