Grandfathered permits

Cement companies are bound to make a lot of money from selling surplus CO2 emission permits; see Irish Times.

The atmosphere is the common property of humankind. The European Union appropriated part of that. Instead of using this to the advantage of all Europeans, it decided to give most of it to selected companies and some of it to the Member States. The government of Ireland decided to pass its share on to the same companies.

These decisions were made years ago and cannot be reversed. In fact, emission allocations have been decided until 2020. We’ve been had, again.

13 replies on “Grandfathered permits”

I guess that in 2007 nobody in the governmental institutions believed that the downturn would be so dramatic. However, the cement sector as well as the other sectors related to construction felt that the recession was on the doorstep already in 2007. This was clearly reflected in the actual emissions of EU ETS installations in 2007.

However, the second period allocation did not change compared with the first period allocation as the responsible institutions not to take into account the available forecasts on growth and emissions. It is very sad story of course, but Ireland is not the first and not the last country who was not able to impose the tighter cap on emissions.

Richard,

may be officials are currently too busy to prevent illegal music downloads from happening. The fight agains criminals who enrich themselves in unjust ways by downloading unpaid Bono Tracks, I guess this takes up a lot of resources and one has to get his priorities straight.

@pongo, nice try on the meme, but not quite. your statement should read:

“poor little greenie realising that carbon trading with regulatory capture industrial lobby groups is a scam.”

@Richard, a little coverage form the other side of the pond:

http://tinyurl.com/37uwkpk

Yikes, this is a nasty example of the flawed nature of the allocation process. There’s a good argument in favour of auctioning here.

Richard, I understood there would be a move towards auctioning in ETS Phase 3 (here)?

@MarcusOC
Indeed: After 2012, different sectors will move at different speeds towards 100% auctioning.

The revenue will flow to the Commission first, who will redistribute according to some equation that I have yet to study — Ireland will get less than 100% of our emissions, though.

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Richard,

With any luck this massive charade will collapse beofre too long and we with some additional luck on top of that we can muster the electoral will to unravel all this damaging nonsense that has posed as policy.

@ Marcus

Full auctioning will be introduced in all sectors by 2027. The commission wanted this to happen by 2020, but several member states and sectoral lobby groups intervened.

Full auctioning will apply to power gen from 2013, and cement as it is not exposed to carbon leakage will hopefully suffer a similar fate soon after.

I haven’t looked at this for a while but the last time I checked the trajectories for the introduction of full auctioning were still being discussed at committee stage in the Commission.

While a carbon tax has undoubted benefits over emissions trading, most analysts understand that the Commission strove to introduce a EU-wide carbon tax but that this was objected to by the member states such as Ireland and the UK.

We are therefore stuck with an imperfect instrument which everyone knows. This instrument continues to be refined and improved, and the eventual introduction of full auctioning and the removal of allocation from member states will further improver emissions trading in the post-2012 period.

Politics is the art of the possible. Emissions trading will reduce European emissions significantly in the period to 2020.

@ jc

Thanks, nice summary. Disappointing to hear UK and ireland objected to a tax. I don’t doubt that the ets will reduce emissions, but as you say these inefficiencies are frustrating…

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