With our fifth Carbon Pricing Hub event, we addressed the question of how to make the EU Emissions Trading System (EU ETS) work for the many rather than the few.
Starting with the presentation of the Emissions Aristocracy report, Carbon Market Watch’s expert on EU industrial decarbonisation, Lidia Tamellini, demonstrated that too many companies still pay too little for their carbon footprint. With two videos from the LIFEETX human stories project, we showed how ETS revenues can benefit society and the environment.
In the panel debate that followed, we discussed these issues with a number of experts: Sarah Nasrawi, a UN Youth Representative on Sustainable Development for the Netherlands, Daniele Agostini, the head of energy and climate policies at Italian energy firm Enel, and CMW’s Tamelliniand MEP Mohammed Chahim, vice-president of the S&D Group. The event was excellently guided by Anna Gumbau, an energy and climate journalist.
The trouble with freebies
Drawing on the ground-breaking Carbon Market Watch report which exposes the EU’s “Emissions Aristocracy” (the 30 companies responsible for half of EU ETS emissions), Tamellini explained how free allowances allow heavy industry to pollute with impunity.
The research results are striking. Even for the audience of our event, people who are already interested in this subject, the scale and allocation of free allowances was quite different from what many expected. Over half of the audience knew “What is the foreseen value of the free allowances that will be distributed between 2021 and 2030 (at the current carbon price)?”: 57% of answered correctly (€400 billion), 38% clicked on €10 billion and 5% thought €2 billion. Half (51%) of our audience knew the right answer to our poll question: “Which sectors accrued the most free allowances overall in 2022?”. Of course, it was the steel sector.
Human of the ETS
The event unveiled the Human Stories project which highlights good examples of how ETS revenue can bankroll positive climate and social solutions, with examples from Greece and Portugal. After showing two short video’s Anna Gumbau interviewed Noemí Rodrigo Sabio, communications officer at Carbon Market Watch. She explained how this project, in an engaging way, makes tangible how relevant the ETS can be for local communities, biodiversity and the climate.
The videos and the presentation were the prelude to the panel discussion. The speakers shed light on many different relevant topics, like how to explain the system and get people, including youth, involved. They discussed the question of whether the ETS gives industry the right incentive to decarbonise, and how the system still needs to improve to do that. They also explored what would happen if the cap goes down fast enough, what other measures can help industry to decarbonise, how the Carbon Border Adjustment Mechanism (CBAM) can help to meet our climate goals, what we will do with unused past allowances, etc.