While WWF consider carbon trading to be sound in principle, it says weak political decisions have left the first phase of the EU ETS (2005-07) ineffectual after member state governments handed out far too many allowances to their industries. This caused the carbon market to virtually collapse with very little, if any, emission reductions made as a result of the scheme.
WWF says that while the European Commission has sought to set stricter caps than those proposed by many Member States for Phase II of the scheme, there are now significant concerns that the second phase (2008-12) will also fail to deliver any significant emissions reductions because of the potential for very heavy use of imported credits from outside the EU.
The report examines the carbon reduction plans of nine EU member states – the UK, Germany, Poland, Ireland, France, Spain, Netherlands, Portugal and Italy – and estimates that 88-100% of their combined emissions reductions targets under the scheme could be met by buying credits from outside the EU, fatally undermining EU emission reduction targets for 2020 and 2030. WWF adds that access to these credits is supposed by law to be “supplemental” to emissions reductions that take place within the EU, saying that considering the large proportion of emissions reductions that could take place beyond the borders of the EU during phase II the NGO strongly questions the robustness of the formula applied by the Commission in assessing Member States compliance with the supplementarity principle.
Dr Keith Allott, head of WWF-UK’s climate change programme said: “There is a real danger that this will lock the EU in to high carbon investments and soaring emissions for many years to come.”
It is vital that these shortcomings are put right in the review for the ETS post-2012, WWF concludes.
