EU Emissions Trading

(1)        The acronyms EU ETS stands for European Union Emissions Trading Systems (EUETS). The EU Emissions Trading System is the cornerstone of the European Union’s policy to combat climate change and at the same time, reduce industrial greenhouse gas emissions cost effectively. The EU ETS is the multi-country system in the world, covering 11,000 power stations and industrial plants in 30 European zone countries whose carbon emissions make up about 50% of Europe’s total.

The European Union Emissions Trading System works on a “Cap and trade” system. In other words, there is a cap or limit on the total amount of certain greenhouse gases that can be emitted by the factories, power plants and other installations in the system. Within this cap, companies receive emission allowances which they can sell to or buy from one another as needed.

(2)        Other countries, particularly the United States are opposed to the EU ETS on several grounds: (1) the policy will negatively impact the United States economic growth, (2) the policy fails to require developing countries participation in emission cutbacks in the same time frame as cutbacks in developed countries, (3) this makes it more difficult for the United States to sustain tax cuts and promote retirement security, (4) it impacts significantly on U.S. households economic well-being and living standards, as well as negatively affect the distribution of income, and finally, (5) it reduces wage growth.

(3).       The United States current position on EU ETS is one protest and disbelief.

(4).       With minor changes due to the economic crisis facing the European Union, the EU ETS current position is “if it ain’t broke, don’t fix it.” As such, EU ETS has expanded its operations to include petrochemicals, ammonia and aluminum industries and additional gases in 2013. At the same time, a series of important changes to the way EU ETS works is expected to take place to strengthen the system. Due to its success, hopes to link up with compatible systems around the world to form the backbone of a global carbon market.

(5).       ICAO should promote a more proactive safety system to develop efficient and effective solutions to meet the needs of the evolving international air transportation system.    

(6).       Is a system to aviation emissions necessary? Why or why not? No, it is not necessary. It is controversial and has met stiff resistance from the rest of the world. On January 2012 carbon emissions was extended to cover aviation, making all airlines to acquire and surrender allowances for carbon emissions produced by their flight, if not all airlines would be fined. Since then, the United States, India, Russia, China and other countries have vowed not to comply.

Directive 2003/87/EC of the European Parliament and the Council of 13 October 2003, Journal

            of the European Union.