EU carbon market reforms need to reach further and arrive sooner

Carbon Market Watch argues that the EU ETS has failed to drive decarbonisation due to a surplus of over 2 billion emission allowances, leading to carbon prices around 5 euros per tonne. While the proposed Market Stability Reserve is a necessary step, the author contends it is 'too little, too late' because it is scheduled for 2021 rather than July 2016 and fails to permanently cancel allowances, which could lead to an unstable carbon price.

• The EU Emissions Trading System (EU ETS) has failed to signal decarbonisation because carbon prices have remained around 5 euros per tonne of CO2, largely due to a surplus of more than 2 billion emission allowances caused by the over-use of international offsets.
• The European Commission's proposal for a Market Stability Reserve to manage the supply and demand of pollution permits is considered insufficient because it is slated to begin operating in 2021, whereas the author argues it should be enacted by July 2016.
• The current reform proposal does not prevent approximately 1.7 billion allowances from entering the market, including 900 million back-loaded allowances and additional 2020 auctions; Thomson Reuters Point Carbon modelling suggests this will result in an unstable carbon price compared to a structural solution of permanently cancelling these allowances.
• The Market Stability Reserve lacks a limit on the amount of allowances it can store over time, meaning surplus allowances will eventually be released back into the market, which may undermine greenhouse gas reductions from other policies and weaken climate action after 2020.

APA

CMW (2014). EU carbon market reforms need to reach further and arrive sooner. Carbon Market Watch. https://carbonmarketwatch.org/2014/10/07/eu-carbon-market-reforms-need-to-reach-further-and-arrive-sooner/

Chicago

CMW. EU carbon market reforms need to reach further and arrive sooner. Carbon Market Watch, 2014. https://carbonmarketwatch.org/2014/10/07/eu-carbon-market-reforms-need-to-reach-further-and-arrive-sooner/.

Wikipedia

{{cite press release |last1=CMW |title=EU carbon market reforms need to reach further and arrive sooner |publisher=Carbon Market Watch |date=7 October 2014 |url=https://carbonmarketwatch.org/2014/10/07/eu-carbon-market-reforms-need-to-reach-further-and-arrive-sooner/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{cmw2014carbon, author = {CMW}, title = {{EU carbon market reforms need to reach further and arrive sooner}}, publisher = {Carbon Market Watch}, year = {2014}, month = oct, url = {https://carbonmarketwatch.org/2014/10/07/eu-carbon-market-reforms-need-to-reach-further-and-arrive-sooner/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }