Putting a price on pollution in Europe's largest climate instrument

The document examines the role of carbon pricing within the EU's Effort Sharing Decision (ESD), which covers approximately 60% of EU emissions. It argues that while carbon pricing is a useful tool, it cannot deliver results alone and must be framed within a supportive policy context. The author critiques the EU Emission Trading System (ETS) for permit oversupply and warns against expanding the ETS into transport and heating, suggesting instead national carbon taxes, permit trading, or auctioning of permits. Specifically, auctioning half of annual reductions could generate over €9 billion between 2021 and 2030.

• The Effort Sharing Decision (ESD) encompasses nearly 60% of carbon emissions in the European Union, specifically targeting the waste, buildings' heat consumption, transport, and agriculture sectors. It aimed for a 10% emission reduction by 2020, with a proposed target of a 30% cut by 2030.
• The EU Emission Trading System (ETS) is currently ineffective at inducing market-led change because it has a significant oversupply of carbon permits, which keeps prices too low.
• Expanding the EU ETS to include the heating and transport sectors is discouraged because it would shift emission reduction responsibility from governments to private actors and undermine more effective policies such as fuel taxation, the Fuel Quality Directive, and Energy Efficiency policies.
• Alternative carbon pricing mechanisms for ESD sectors include national energy taxes, the bilateral trading of emission permits between Member States, and the auctioning of permits. Auctioning just half of the annual reductions is estimated to generate more than €9 billion from 2021 to 2030.
• Revenues from carbon pricing should be used to fund cost-efficient projects, such as public transport infrastructure or the deep renovation of large building stocks, to attract private sector engagement and secure a low-carbon transformation.

APA

Cangas, B. H. (2016). Putting a price on pollution in Europe's largest climate instrument. Carbon Market Watch. https://carbonmarketwatch.org/2016/04/13/putting-a-price-on-pollution-in-europes-largest-climate-instrument/

Chicago

Cangas, Barbara Herrero. Putting a price on pollution in Europe's largest climate instrument. Carbon Market Watch, 2016. https://carbonmarketwatch.org/2016/04/13/putting-a-price-on-pollution-in-europes-largest-climate-instrument/.

Wikipedia

{{cite press release |last1=Cangas |first1=Barbara Herrero |title=Putting a price on pollution in Europe's largest climate instrument |publisher=Carbon Market Watch |date=13 April 2016 |url=https://carbonmarketwatch.org/2016/04/13/putting-a-price-on-pollution-in-europes-largest-climate-instrument/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{cangas2016putting, author = {Cangas, Barbara Herrero}, title = {{Putting a price on pollution in Europe's largest climate instrument}}, publisher = {Carbon Market Watch}, year = {2016}, month = apr, url = {https://carbonmarketwatch.org/2016/04/13/putting-a-price-on-pollution-in-europes-largest-climate-instrument/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }