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What is the ETS? ETS?... Yes, but not like this! What we can do

What is the ETS? ETS? ... Yes, but not like this ! What can we do?. What is the ETS? ETS?... Yes, but not like this! What we can do. What is the ETS? ETS? ... Yes, but not like this ! What can we do?. What would you think if petrol was rationed...

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What is the ETS? ETS?... Yes, but not like this! What we can do

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  1. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • What is the ETS? • ETS?... Yes, but not like this! • What we can do

  2. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? What would you think if petrol was rationed... And only those with the biggest cars, were given permits to buy it.

  3. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • The ETS has given carbon permits worth €170 billion to the biggest polluters in Europe • But is structurally counterproductive in reducing Europe’s carbon emissions

  4. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? The European Emissions Trading System (ETS) • Aims to limit the number of tonnes of carbon dioxide the EU releases each year • by restricting the number of permits that are available • Permits to release CO2 are only being given to some large energy-users

  5. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? Objectives of the ETS: • To reduce EU greenhouse gas emissions • To do so at least cost by trading in carbon emissions

  6. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate

  7. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • Only issued to 5,000 firms • Accounts for only 45% of the EU's total CO2 emissions • Despite the ETS, most EU countries are having problems with Kyoto targets

  8. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • It distorts competition • Since all firms use energy, those firms which use enough fossil energy to qualify for the free emissions permits gain a big advantage over those which do not

  9. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • Ecocem Example

  10. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • No-one knows exact allocations from 2008 onwards • Total British allocation for the 2005-2008 period was still uncertain in February 2006 • Firms have no basis to plan

  11. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate “I have an uncomfortable feeling that we might be singled out for a hefty cut in emissions permits when the next allocation plan emerges” David Porter,Chief Executive,Association of Electricity Producers

  12. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • Firms can charge their customers for permits used in their production processes • For large firms, permits were given free... • enabling them to make profits at the expense of their customers.

  13. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate Emissions permit schemes can be imposed either: • 'upstream‘, where a handful of suppliers sell fossil fuels to the economy • or 'downstream' on millions of final energy users. • The ETS is part-way downstream.

  14. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • The European Commission is taking proceedings against Germany for inadequately preparing for emissions trading • Proceedings are also being brought against; Cyprus, Greece, Luxemburg, Malta, Italy, Spain, Austria & Poland

  15. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • The atmosphere is the common property of us all • The right to its use as a dump for ghgs belongs equally to us all • With no outcry, a firm's emissions allocation will become a legal entitlement • Common property will have been privatised by stealth

  16. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate It encourages polluting plants to stay open: • Almost all member states withdraw permits from companies if they close dirty plants • This creates an incentive, equal to the value of the permits, to keep dirty plants open

  17. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • The permit scheme puts up electricity prices... • Benefiting wind farms... • New gas-fired power stations also benefit - they are given the permits they require to buy their fuel • This effectively reduces the cost of constructing a new power station

  18. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate "For a new combined cycle gas turbine electricity generator, the subsidy in the period 2005-2012 could amount to at least 50% of the capital cost of the new plant“ Prof. John Fitz GeraldQuarterly Economic CommentaryApril 2004

  19. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • Each government sets the limits on its own emissions • This allows governments to set lax targets... • to avoid penalising their domestic economies • and to minimise the number of permits their country might have to buy from other EU members

  20. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate EUA 2006 prices Daily bid-offer close EUA Dec 2006 prices from December 2004 in the OTC market. The data was updated 4 May 2006 and is published daily at www.pointcarbon.com.

  21. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • Governments decide how many permits each energy user should get • Civil servants can easily assign more permits than a company is likely to use • Officials could be bribed to underestimate a company's emissions

  22. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • Far more will be at stake when it comes to agreeing shares beyond 2012 • There is ultimately no way to resolve comparisons of unlike circumstances • Conflict could be avoided by giving equal permits to all EU citizens • The market could then work things out itself

  23. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate • Under the Kyoto Protocol, a country can import extra permits from JI & CDM • The Protocol says these must be "supplemental to domestic efforts” • Lawyers doubt if the Commission can limit countries using such permits under the EU ETS

  24. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate “We have been unable to trace any newspaper or television coverage of the choices involved in setting up the system during the period in which it would have been possible for the plans to have been changed.” Feasta

  25. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate The official briefing paper limited itself to discussing: • Which sectors of the economy should be covered by the scheme • How many permits should be given free • What should happen to the revenue from those permits that were sold

  26. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Inadequate • Unfair • Uncertain • Costly • Arbitrary • Biased • Polluting • Anti-Renewables • Corruptible • Nation v Nation • No Cap • No Debate The real issues were not discussed: • Who owned the rights for the permits being issued? • Was it sensible to operate “part-way downstream”? • There has been no serious public scrutiny of the development of national allocation plans

  27. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? The Objectives of the ETS are sound • To reduce European green house gas emissions  • To do so at least cost, facilitated by an emissions trading system  But the current design of the ETS fails to deliver on either [X]

  28. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? What does FEASTA propose?

  29. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • EU ETS should be reformed • From 2008, permits covering all emissions allowed in a any year under the EU’s Kyoto commitment should be divided up... • and distributed equally to all EU citizens • Permits would be tradable • Citizens could sell their permits • Businesses would need to buy permits from citizens • Banks & post offices could mediate

  30. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? • Is Adequate • Is Fair • Removes Uncertainty • Compensates the public for higher prices • Administratively straight forward & cheap to run • Confirms rights to use the atmosphere as a common resource • Does not subsidise construction of fossil fuel plants • Encourages closure of dirty plants • Little scope for corruption • Does not pit nation against nation • Offers a good prototype for a global emission trading • Would have widespread public support

  31. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? We Need: AReal Review of the Emissions Trading Scheme Sign up to ARREST www.euemissions.org.

  32. Whatis theETS? ETS?...Yes,but notlike this! Whatcanwe do? THE END

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