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PROPOSED MODIFICATIONS TO THE EMISSIONS TRADING DIRECTIVE : POCKLINGTON :: :: : (2008) 20 ELM 133133
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Certainties and uncertainties – proposed

modifications to the Emissions Trading Directive

David Pocklington
Richard Leese
British Cement Association

Introduction 1 1 1 1 1
4
Indonesia set out a road map towards reaching such an
More than any other environmental issue, the mitigation agreement at its meeting in Copenhagen in December
of climate change is a global concern and, as such, the 2009 (COP 15).
proposed modifications to the EU Emissions Trading The achievement of such an agreement at COP 15
Directive need to be considered in the context of other has a direct bearing on the Commission’s proposals, which
2
concurrent measures proposed by the Commission and include options depending upon whether or not an
in relation to climate change as a whole. Industry is one international agreement is reached. While in environmental
of the major sources of anthropogenic greenhouse gas terms this could be considered as one of its strengths, in
emissions and the achievement of reductions in this area terms of certainty it is a distinct weakness.
is important. However, this must not to be to the exclusion The EU Emissions Trading Scheme (EU ETS) is
of effective measures to reduce emissions from other currently the world’s largest single carbon market,
sources. accounting for 67 per cent in terms of volume and 81 per
5
The capping, reduction and trading of carbon dioxide cent in terms of value. It has worked as the driver of the
and other greenhouse gases is generally considered to global credit market, triggering investments in emission
be an efficient means of limiting emissions from existing reduction projects and indirectly linking 147 countries to
and new sources, and is one of the so-called ‘flexible the EU ETS through JI/CDM projects.
mechanisms’ within the Kyoto Protocol that allow The Emissions Trading Directive 2003/87/EC
developed countries to gain credits/allowances for includes provisions for its review and harmonisation
emissions reductions that have taken place in other (Article 30). Experience of the first period and the
countries where this is cheaper or easier to achieve than National Allocation Plan (NAP) assessment of the second
reducing domestic emissions. 3 period indicated to the Commission that the overall
Although the Kyoto Protocol eventually came into functioning of the EU ETS could be improved in a number
force in October 2004 following Russia’s ratification, its of aspects, and in November 2006 it initiated a review of
overall reduction target of 5.2 per cent is woefully the EU ET Directive, with a view to streamlining,
6
inadequate to achieve any meaningful reduction of carbon strengthening and expanding the EU ETS. On 10 January
dioxide emissions. Few countries have followed the lead 2007 the Commission issued a Communication ‘Limiting
o
of the United Kingdom and Europe, which launched their Global Climate Change to 2 Celsius’ which set out its
greenhouse gas based emissions trading schemes in 2002 proposals and options for keeping climate change to
7
and 2005 respectively. manageable levels. This called for:
However, over the past two to three years an increasing
number of countries have become committed, in principle • an independent EU commitment to achieve a reduction
at least, to the development of a post-Kyoto global of at least 20 per cent in the emission of greenhouse
agreement on greenhouse gas reductions. The most recent gases by 2020 compared with 1990 levels
meeting of the Conference of the Parties (COP) in • a target of a 30 per cent reduction by 2020, subject

4 The United Nations Climate Change Conference of the Parties (COP
1 The views expressed in this article are those of the authors, and do 13) in Bali 3–15 December 2007, resulted in the Bali Road Map
not necessarily reflect those of the British Cement Association or its http://unfccc.int/documentation/decisions/items/
member companies. 3597.php?such=j&volltext=/CP.13#beg.
2 Proposal for a Directive of the European Parliament and of the Council 5 Note 2 p 2.
amending Directive 2003/87/EC so as to Improve and Extend the 6 Communication ‘Building A Global Carbon Market – Report Pursuant
Greenhouse Gas Emission Allowance Trading System of the Community to Article 30 of Directive 2003/87/EC’ COM(2006) 676 (13
COM(2008) 16 final (23 January 2008). http://ec.europa.eu/ November 2006).
environment/climat/emission/ets_post2012_en.htm; 7 ‘Communication from the Commission to the Council, the European
com_2008_16_en-1.pdf. Parliament, the European Economic and Social Committee and the
3 Kyoto flexible mechanisms include emissions trading; industrial country Committee of the Regions – Limiting Global Climate Change to 2
joint implementation (JI); and clean development mechanism (CDM) degrees Celsius – The Way Ahead for 2020 and Beyond’ COM/2007/
(10 January 2007). 0002 final (10 January 2007).

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