Manipulation of the carbon emissions system threatens climate targets | 9/28/2009 | Staff
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Manipulation of European Union Emissions Trading system (EU ETS) by the buy, bank, burn program compensates unregulated emissions while regulated sectors carry a large part of the burden. This distorts the balance between regulated firms and non-regulated projects, so parties outside the EU ETS can be virtuous at the cost of others. Environmental economists Reyer Gerlagh and Roweno Heijmans of the Tilburg School of Economics & Management discovered a leak in the system.

The EU Emissions Trading System (EU ETS) is an important system to reduce CO2 emissions in the Netherlands and Europe in order to achieve the climate targets (zero emissions by 2060). But is it effective? And can we, citizens, consumers, contribute? Yes, indeed. However, the system is leaking, the authors discovered. Their findings were recently published in Nature Climate Change.

Companies - Emission - Rights - Ton - CO2

Large companies must buy emission rights for each ton of CO2 they emit. Without these permits they are not allowed to emit CO2, otherwise they will be severely punished with high fines. Companies can buy, sell and burn the rights, but also may save them for later ('bank'). In the Netherlands the Dutch Emissions Authority (NEa) is responsible for compliance and punishment.

EU ETS, the flagship of European climate policy, regulates the greenhouse gas emissions of some 11,000 companies, together accounting for 45 percent of Europe's emissions. Approximately 450 companies in the Netherlands fall under the ETS regime, of which 20 percent is responsible for 90 percent of total Dutch CO2 emissions covered by EU-ETS. We are talking about large, energy-intensive companies in the electricity sector, refining industry, chemical industry and the metal sector, such as Shell, Exxon, Tata Steel, Dow Benelux, Akzo and Chemelot.

Emission - Rights - Governments - Organizations - Consumers

Emission rights can also be purchased, sold and banked by governments, non-governmental organizations and consumers from outside the ETS. Unregulated sectors include agriculture, road transport and...
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