We suggest to optimize the EU ETS introducing immediately a Carbon Price for the 55% of the EU’s emissions not covered by the ETS and, at the same time, we suggest a Border Tax Mechanism to prevent Carbon Leakage
All our effort is for a rapidly reduction of the Greenhouse Gas Emissions to make sure we stay below 1.5% of temperature rising and to also make sure we will have a Zero Carbon Society by 2050.
is to implement Carbon Price Mechanisms as soon as possible in all parts of the Planet and adopt Carbon Border Taxes to avoid carbon leakage.
In other words, where a Carbon Price mechanism is in place and is effecting the final price of goods or services for their contribution to carbon emissions, should also be in place a Carbon Border Tax mechanism to rebalance the price of similar goods or services produced in countries with an higher level of carbon emissions.
Moreover, to implement a voluntary certification system that will allow any company, located in any country, to pay not an average price related to the average level of emissions of its origin country but for the real impact in terms of carbon emissions. This voluntary certification will stimulate best practices for carbon emission reduction and innovation instead of carelessness to carbon emissions that would certainly be generated in case of just a standard Carbon Border Tax for each country.
We prefer a mechanism using a Carbon Price for the emissions instead of a Cap & Trade Mechanism just because we consider the first one much easier to be implemented and also because having evidence about carbon emissions price for the next decades will give the possibility to all companies of organizing the policies for carbon emission reduction of their products and/or services in order to try to mitigate the carbon price rising.
The most wide-scale Carbon Price Mechanism implemented so far is in the European Union, though its Emission Trading System (ETS), in place since 2005. The ETS involves all 28 EU Member States plus Iceland, Norway and Liechtenstein. The system covers about 45% of the EU’s emissions (power sectors – manufacturing industry – aviation limited to EU internal flights). the EU ETS has gone through several reforms. The new revision of the ETS will be implemented with the start of a new trading phase in January 2021. From January 2020 the EU ETS is also linked to the Swiss ETS.
We also suggest that the rapid implementation should save the poorest countries that nowadays give a very low contribution to emissions. EU is also one of the world’s largest economic market and all market policies implemented in EU is able to influence the rest of the world.
Carbon Price should start at a value between 25 €/tCO2 and 50 €/tCO2 and rise by 2030 up to 70 – 100 €/tCO2 and progressively grow towards higher values to meet almost Zero CO2 emissions by 2050.
Lather on EU will decide whether maintain both mechanisms in place or move, for simplicity and uniformity, just to Carbon Price renouncing to ETS.
Any other new initiative around the world on carbon pricing will be appreciated and supported by the WCP Association but we consider Europe strategic as a possibility to accelerate the transition just because it is the largest are in the world where a system is already in place and an implementation can be very quick.
For the above reasons we suggest optimising the EU ETS by immediately introducing a Carbon Price for the 55% of the EU’s emissions not covered by the ETS and, at the same time, adopting a Border Tax Mechanism to prevent carbon leakage.
Why a Worldwide Carbon Price
The price we pay for most of the services we receive and most of the goods we use do not reflect the cost of carbon emissions caused by making, distributing or consuming them. Carbon pricing solve this problem adding to services and goods a price for their contribution to greenhouse gas emissions.