The CBI today (Monday) commented on the Environmental Audit Committee’s third report on the EU carbon emissions trading scheme.
John Cridland, CBI Deputy Director-General, said:
“The EU ETS remains the best way to reduce carbon emissions cost-effectively, and is currently helping to achieve Kyoto protocol and EU 2020 emissions targets.
“It's good to see the Committee backing the Government's support for emissions trading and it is right to point out that there needs to be a global response to climate change. Linking ETS schemes across the world could help, provided the integrity of the EU’s scheme is not undermined.
"We agree with the Committee that there is uncertainty about whether the EU ETS will be sufficient to encourage future investment in technologies like nuclear, but there is a debate to be had about whether a floor price is the right response. It should be remembered that many low carbon technologies, such as renewables and clean coal, have their own support schemes, with a higher carbon price that encourages new technologies to be brought to market."
“The reason the carbon price is currently lower than expected is because the market believes the recession will make the EU’s targets easier to meet. The Committee is right to raise the option of reducing the ETS cap, but in practice this will depend on whether the EU decides to increase its 2020 targets which, in turn, will depend on international negotiations.”
CBI set out its recommendations on the future of the EU ETS in a report called Trading up: the future of emissions trading: http://climatechange.cbi.org.uk/uploaded/CBI_emissions_trading_Dec_09.pdf