EU ETS (Sustainability Policies)

It is evident that change regarding green house gas (GHG) emission policy is crucial on a global scale. Depletion of natural resources are increasing, human induced climate fluctuations are becoming more prominent, and the stability of ecosystems on a grand scale are threatened significantly due to increasing emissions of green house gases. The European Union has implemented a system to encourage industries to decrease green house gas emissions to mitigate climate change efficiently. By employing a program that addresses a significant culprit of climate change on a fundamental level, the EU is establishing itself as a key player in GHG emission reduction and climate change mitigation.

The European Union Emissions Trading System (EU ETS) utilizes the cap and trade system, requiring industries to only emit their allotted amount of GHG’s while offering the ability to trade excess emission allowances between companies. By employing this program, industries functioning within this system will reduce the amount of emissions expelled in 2005 by 21% in 2020. As the cap provides a limit for all industries within the EU ETS, each company receives an allotment of emissions and is able to trade them amongst each other. Should a company emit less- emissions than were provided, they are able to sell their allowances to companies who need more allowances or keep them for security of future emission needs.  If a company exceeds their emission allowances, they are obligated to pay significant fines, which discourage them from exceeding their limit. This aspect is key to ensuring that carbon emissions are valued and regarded cautiously.

As this system establishes carbon as a commodity, it requires fundamental aspects of industrial systems to change. Climate change mitigation is now institutionalized within company’s daily operations and demands that industries operating within the EU ETS to decrease emissions and encourages a shift towards utilization of clean technologies. By leading the movement towards clean technology investment, low-carbon emission practices, and climate change mitigation, I would argue that the EU ETS is setting a global precedent.

Key elements that make this policy highly effective are its flexibility, long-term goals, and efficient implementation. By providing flexibility within the trading element, over allocation is inherently regulated which speaks to the fundamental efficiency of the system. The cap and trade system is key to diminishing the effects of GHG emissions and efficiency in alleviating the development of climate change. The long-term element allows for companies to invest wisely and take developing clean technologies into consideration while effectively reducing GHG emissions exponentially. While the EU ETS should be commended for its efforts, it should be noted that it will take a global approach to have an effective impact on climate change. I believe that it’s crucial for cap and trade systems to be employed globally, demanding industries to be aware of their emissions and impact while promoting clean technology adaptation.

Sources:

The European Union Emissions Trading System: A Succinct Review

Climate Action: The EU Emissions Trading System (EU ETS) (http://ec.europa.eu/clima/policies/ets/index_en.htm)

Comments Off on EU ETS (Sustainability Policies) / 16 Feb 2013 por Cianna Walker Carrillo
IMSD /

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