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Outline of Comments

Uncertainty about Emission Rights and Energy Prices - and Impact on Economic Growth Thomas L. Brewer Associate Professor, Georgetown University, Washington DC and Associate Fellow, Centre for European Policy Studies, Brussels. Outline of Comments.

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Outline of Comments

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  1. Uncertainty about Emission Rights and Energy Prices- and Impact on Economic GrowthThomas L. BrewerAssociate Professor, Georgetown University, Washington DCandAssociate Fellow, Centre for European Policy Studies, Brussels Brewer - Stockholm - 12.12.2006

  2. Outline of Comments Uncertainty and Transparency Issues about the Emissions Trading Scheme Three Episodes Current Situation Offsetting Border Measures to Address Energy Price and Competitiveness Issues Brewer - Stockholm - 12.12.2006

  3. Three Episodes of Regulatory Uncertainty and Their Effectson EUA Prices • Spring 2004 • Spring 2006 • Autumn 2006 Brewer - Stockholm - 12.12.2006

  4. EUA Prices:February 2003-June 2004(From Point Carbon – used with permission) Brewer - Stockholm - 12.12.2006

  5. Price developments on the EU market: Nov. 05 – Oct. 06 Brewer - Stockholm - 12.12.2006

  6. Current Situation:Commission Decision of 29 November • 10 proposed NAPs rejected by the Commission (including Sweden, Germany and UK) • 6 not yet submitted (Austria, Czech Rep., Denmark, Hungary, Italy, Spain) • 9 pending Brewer - Stockholm - 12.12.2006

  7. Specifics of Rejections Germany: Reduce total from 482 mmt to 453.1 mmt Include new power plants UK: Inadequate list of plants Total allocations okay (246.2 mmt) Sweden: Next slide Brewer - Stockholm - 12.12.2006

  8. Criteria Contravened by Swedish Plan 2. Allowances consistent with actual and projected progress toward fulfilling contribution to Community’s commitments in Decision 93/389/EEC 3. Allowances consistent with potential to reduce emissions 10. List of installations covered with quantities of allowances to be allocated to each one 12. JI/CDM limit: maximum percentage of total allowances to be CERs and ERUs Brewer - Stockholm - 12.12.2006

  9. Uncertainty and/or Transparency Brewer - Stockholm - 12.12.2006

  10. Transparency Uncertainty Brewer - Stockholm - 12.12.2006

  11. Inevitable Uncertainty and Controllable Transparency Brewer - Stockholm - 12.12.2006

  12. Uncertainty Issues More Generally Four Levels 1. Terms and implementation of members’ National Allocation Plans (NAPs) 2. Future EU allocation and other rules 3. Industry coverage 4. International interactions of ETS with other climate regulatory regimes … and the trade regime Brewer - Stockholm - 12.12.2006

  13. International Competitiveness Off-setting border measures on imports from ‘cheap energy’ non-Kyoto countries? • EU Parliament resolution • Commission position • French government recent statement Brewer - Stockholm - 12.12.2006

  14. For further information… “Business Perspectives on the EU Emissions Trading Scheme,” Climate Policy, 5 (2005): 137-144 “The WTO and the Kyoto Protocol: Interaction Issues,” Climate Policy, 4 (2004): 3-12 www.usclimatechange.com brewert@georgetown.edu Brewer - Stockholm - 12.12.2006

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