Super Tuesday success

On the same day that the UK’s Committee on Climate Change advised the government to cut GHG emissions by 80% by 2050 and European governments started systematic nationalisation of banks, the European Parliament voted in favour of three papers arguably just as momentous.

The three votes that went through on ‘Super Tuesday’ were:

1. Design of phase 3 (2013 – 2020) of the EU Emission Trading Scheme

• Electricity generators will not be given any EUAs for free in phase 3
• 15% auctioning to carbon-intensive and trade-exposed industries (that’s pretty ambitious)
• All auction revenue must be earmarked for climate change initiatives (the UK will not like this)
• The fine per tonne will be EUR 100 (the same as phase 2)

2. Emission cuts

• 20% by 2020, rising to 30% if a global deal is agreed at Copenhagen next year
• 60% – 80% by 2050
• Member states will be allowed to trade reductions on their own terms (separately to the EU ETS) and use the revenue for carbon reduction projects
• Use of CERs capped at 8% of 2005 emissions (the UK will not like this either). This will flow through to the EU ETS.

3. Electricity plants will not be able to produce more than 500g CO2 per kWh (which would rule out new coal without CCS).

The package still has to go to the European Council before it becomes law. It’s still in good shape – the emission cuts are ambitious and the auctioning/hypothecation proposals are realistic. Some member states (including the UK) will argue against parts of the package and it could still be watered down. A strong package is critical if Europe is to lead COPs 14 & 15, which will determine emissions long beyond the current financial crisis.