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This seems to be based upon the idea that the EU ETS system works. Which it doesn't. Since many years. Far too many emission certificates have been given out f

by hannob 9y ago

This seems to be based upon the idea that the EU ETS system works. Which it doesn't. Since many years. Far too many emission certificates have been given out for free to industries. And there are plenty of loopholes in the system.

tom_mellior 9y ago
> Far too many emission certificates have been given out for free to industries. My understanding was that that was only in the beginning, when the system was introduced. Businesses that previously polluted for free could continue to pollute for free for a transitional period. I may be wrong. > And there are plenty of loopholes in the system. Do you have a good source to read up on this?
- arekkas 9y ago
  If you speak German, this Wikipedia article explains the issues really well: https://de.wikipedia.org/wiki/EU-Emissionshandel https://de.wikipedia.org/wiki/EU-Emissionshandel Primary takeaways: 1. Price is volatile, depending on weather and season 2. For 2°C goal, the price per metric ton should be $50 but it's only €5.5 3. Politics - elections, growth, and other factors play a significant role in setting cap and price.
  - tom_mellior 9y ago
    > Price is volatile, depending on weather and season Not sure why you think that is a problem. Emissions depend on weather and season. It would not be a market if it didn't react to relevant aspects of reality. > price per metric ton should be $50 There are too many certificates, agreed. I wasn't surprised to read that Parliament advocated stricter rules. > Politics - elections, growth, and other factors play a significant role in setting cap and price. I don't find that in the article. It does say that the Commission screwed us over by empting airlines, but well, that's what we expect from the Commission. Anyway, so far I'm not convinced about the alleged loopholes mentioned above. The system doesn't work as an efficient market, that is true. As far as I can tell, that could be fixed by stricter caps.
- hannob 9y ago
  > My understanding was that that was only in the beginning, when the system was introduced. Businesses that previously polluted for free could continue to pollute for free for a transitional period. I may be wrong. You are wrong: https://ec.europa.eu/clima/policies/ets/allowances_en https://ec.europa.eu/clima/policies/ets/allowances_en The free allowances are declining slowly, but there's no plan whatsoever to discontinue them. > Do you have a good source to read up on this? It's a complicated issue, but roughly things like this can happen: You can get extra certificates if you can show that you funded some kind of climate project somewhere outside of the EU ETS. This is called Clean Development Mechanism. Then you could do something like this: fund a particularly bad industrial plant that creates severe emissions of highly potent greenhouse gases. Then you create a CDM project to reduce these emissions again. You get emission certificates for a plant that you only built dirtier in the first place. Plenty of such schemes have been done in combination with HFC 23 (a very potent greenhouse gas that gets created in some industrial processes), wikipedia is a good starting point: https://en.wikipedia.org/wiki/Clean_Development_Mechanism#Destruction_of_HFC-23 https://en.wikipedia.org/wiki/Clean_Development_Mechanism#De... For HFC 23 this loophole has been closed. But there are plenty more such problems. Further reading, there's an NGO focused on such issued called Carbon Trade Watch: http://www.carbontradewatch.org/ http://www.carbontradewatch.org/ My examples are a bit dated, because it's been a while when I was following it in detail. But it's a weird system that's so corrupted by lobbying that it hardly does any good.

by hannob 9y ago

tom_mellior 9y ago

> Far too many emission certificates have been given out for free to industries. My understanding was that that was only in the beginning, when the system was introduced. Businesses that previously polluted for free could continue to pollute for free for a transitional period. I may be wrong. > And there are plenty of loopholes in the system. Do you have a good source to read up on this?

arekkas 9y ago
If you speak German, this Wikipedia article explains the issues really well: https://de.wikipedia.org/wiki/EU-Emissionshandel https://de.wikipedia.org/wiki/EU-Emissionshandel Primary takeaways: 1. Price is volatile, depending on weather and season 2. For 2°C goal, the price per metric ton should be $50 but it's only €5.5 3. Politics - elections, growth, and other factors play a significant role in setting cap and price.
- tom_mellior 9y ago
  > Price is volatile, depending on weather and season Not sure why you think that is a problem. Emissions depend on weather and season. It would not be a market if it didn't react to relevant aspects of reality. > price per metric ton should be $50 There are too many certificates, agreed. I wasn't surprised to read that Parliament advocated stricter rules. > Politics - elections, growth, and other factors play a significant role in setting cap and price. I don't find that in the article. It does say that the Commission screwed us over by empting airlines, but well, that's what we expect from the Commission. Anyway, so far I'm not convinced about the alleged loopholes mentioned above. The system doesn't work as an efficient market, that is true. As far as I can tell, that could be fixed by stricter caps.
hannob 9y ago
> My understanding was that that was only in the beginning, when the system was introduced. Businesses that previously polluted for free could continue to pollute for free for a transitional period. I may be wrong. You are wrong: https://ec.europa.eu/clima/policies/ets/allowances_en https://ec.europa.eu/clima/policies/ets/allowances_en The free allowances are declining slowly, but there's no plan whatsoever to discontinue them. > Do you have a good source to read up on this? It's a complicated issue, but roughly things like this can happen: You can get extra certificates if you can show that you funded some kind of climate project somewhere outside of the EU ETS. This is called Clean Development Mechanism. Then you could do something like this: fund a particularly bad industrial plant that creates severe emissions of highly potent greenhouse gases. Then you create a CDM project to reduce these emissions again. You get emission certificates for a plant that you only built dirtier in the first place. Plenty of such schemes have been done in combination with HFC 23 (a very potent greenhouse gas that gets created in some industrial processes), wikipedia is a good starting point: https://en.wikipedia.org/wiki/Clean_Development_Mechanism#Destruction_of_HFC-23 https://en.wikipedia.org/wiki/Clean_Development_Mechanism#De... For HFC 23 this loophole has been closed. But there are plenty more such problems. Further reading, there's an NGO focused on such issued called Carbon Trade Watch: http://www.carbontradewatch.org/ http://www.carbontradewatch.org/ My examples are a bit dated, because it's been a while when I was following it in detail. But it's a weird system that's so corrupted by lobbying that it hardly does any good.