Interesting to learn of expert opinion emerging from the Fraunhofer Institute.....Wonder if this is the same Fraunhofer Institute in Ettlingen organising the next European Non-Lethal Weapons conference? Hmmm very handy to have all the corporate options covered....


Steve

-----Original Message-----
From: Discussion list for the Crisis Forum [mailto:[log in to unmask]] On Behalf Of Chris Keene
Sent: 26 February 2007 21:12
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Subject: [Fwd: [Nocarbontrade-l] European carbon trading "will not lead to significant cuts in emissions by companies" in its 2nd phase any more than it did in its 1st phase]




-------- Original Message --------
Subject: 	[Nocarbontrade-l] European carbon trading "will not lead to 
significant cuts in emissions by companies" in its 2nd phase any more 
than it did in its 1st phase
Date: 	Mon, 26 Feb 2007 20:25:47 +0000
From: 	Larry Lohmann <[log in to unmask]>
To: 	[log in to unmask], [log in to unmask]




'"The EUETS has given no extra incentives for greenhouse gas reductions 
or changes to the fuel mix," said Philip Luyten, environment manager at 
Total Petrochemicals.'



ENDS Report
February 2007


EUETS will not drive abatement in phase 2

Even with a tight cap on emissions in the second phase, the EU emissions 
trading scheme (EUETS) will not lead to significant cuts in emissions by 
EU companies, delegates at ENDS’ second emissions trading conference 
heard at the end of January.

Dr Joachim Schleich of the Fraunhofer Institute in Germany compared the 
emissions caps in 23 national allocation plans (NAPs) with the verified 
emissions from the scheme’s first year and projected emissions in 2010.

Presenting his findings at the ENDS conference, he highlighted the 
differences between the 12 NAPs which have been amended by the European 
Commission (ENDS Report 383, pp 46-47 
<http://www.endsreport.com/article.cfm?ArticleRef=383068>), and the 
remaining 11 NAPs so far published which have yet to be assessed.

On average, the caps in the 11 to be assessed are only 2% lower than 
projected emissions in 2010, while the caps in the 12 amended NAPs are 
set around 12% lower than projected emissions

He told delegates that even with the tougher caps the EUETS will require 
only modest emissions reductions by installations in the second phase 
because member states and the Commission have not set a tight limit on 
the use of Kyoto credits.

The 11 NAPs yet to be assessed set caps around 42MtCO_2 lower than 
business-as-usual emissions in 2010, but they propose to allow more than 
300MtCO_2 , of Kyoto credits into the scheme, effectively requiring no 
emissions reductions by the industries covered.

The 12 NAPs amended by the Commission are more demanding. Their combined 
caps are 142MtCO_2 lower than business as usual, but even here the 
Commission is proposing to allow more than 111MtCO_2 of Kyoto credits. 
Thus 78% of the effort can be met by purchasing emissions reductions 
outside the EU.

"In the second phase, even if there is a similar judgment for the 
remaining plans, [installations] won’t need a lot of reductions," he 
said. "The incentives to reduce internally may be weakened."

Delegates with direct experience of the scheme said the low price of 
carbon in the first phase had not offered much incentive to cut emissions.

"Let’s be realistic and honest, the market was long in the first phase, 
so the EUETS has given no extra incentives for greenhouse gas reductions 
or changes to the fuel mix," said Philip Luyten, environment manager at 
Total Petrochemicals.

He said that the high cost of energy had been much more of a driver 
encouraging firms to cut emissions. However, he did reveal that many 
companies are now factoring a cost of carbon into future investment plans.

German Environment Minister Sigmar Gabriel has announced his country 
will accept the cap set by the Commission. The statement marks a u-turn 
by the German government which had threatened a court challenge (ENDS 
Report 384, p 12 
<http://www.endsreport.com/article.cfm?ArticleRef=384013>). The German 
decision leaves Slovakia isolated as the only member state considering 
an appeal against the Commission’s cuts.

The price for allowances in the second phase remained stable at €14.60 
on the news, but the price of current allowances continued to fall, 
reaching a new low of just €1.23 as ENDS went to press.





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