Commission dithers over carbon plan

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If there's one thing we know for certain, it is that the private sector needs certainty. Certainty of future policy direction. Certainty of how government actions will impact their business operations and costs. Certainty not just for the short term, but for the long term, that can be factored into business investment and planning cycles that reach far out into the future.

Although the publication of the European Commission low-carbon roadmap on Tuesday (8 March 2011) was welcome because we finally received confirmation that the Commission will not pursue an emissions reduction target of -30%, it nevertheless provides only partial certainty.

Whilst the political road to Tuesday's announcement has been a rocky one, it ended with an almost sensible outcome with the Commission finally acknowledging a firm evidence base is needed ahead of any target announcements being made. We have gone from DG Climate Action “leading the way” by forcing the EU to move to tighter top down targets for 2020, to sensible voices in other parts of the Commission and Member States calling for a better understand of what such a move might do to the EU manufacturing sector. Therefore, for now, the 2020 target remains at 20%.

But what is still highly uncertain is the intention by the Commission to consider setting aside a significant amount of carbon allowances in the third phase of the emissions trading scheme (ETS), which begins in 2013 and runs until 2020. Why can't the Commission just tell us: Is it going to take some 800 million allowances permanently out of the system or not? Whilst we firmly believe that this is a market and should be left as one, the uncertainty of whether the market is going to be artificially tempered with or not is even more unwelcome than disrupting the market itself.

Surely such indecisiveness will not help us meet our climate change goals, but delay action and make Europe an uncertain place for future investments.

Author

Director of UK Steel

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