The EU’s hot air – lifting the fog

The policy brief warns that the EU's 2030 commitment to reduce emissions by at least 40% below 1990 levels could be undermined by a projected surplus of up to 4.5 GtCO2e in the EU Emissions Trading System (EU ETS) and 1.5–1.7 GtCO2e in the Effort Sharing Decision (ESD). If these 'hot air' allowances are carried over, the effective emission reductions for 2030 could drop to 32%. The author recommends the permanent cancellation of at least 2 billion EU allowances by the end of 2020 and the prohibition of pre-2020 reductions in the 2030 ESD, while calling for robust international accounting and eligibility criteria under the Paris agreement to prevent similar issues globally.

• The EU's 2030 target of reducing emissions by at least 40% below 1990 levels could be effectively reduced to 32% if existing 'hot air' allowances are carried over into the post-2020 period.
• A surplus of 2.6 to 4.5 GtCO2e is expected to accumulate in the EU Emissions Trading System (EU ETS) by 2020, which could undermine the system's environmental integrity if carried over.
• The Effort Sharing Decision (ESD) is expected to accumulate a surplus of 1.5 to 1.7 GtCO2e by 2020; if this is carried over, the 2030 ESD target of 30% reductions compared to 2005 levels could drop to 19% effective reductions.
• The Kyoto Protocol's lack of environmental integrity in market mechanisms created a 'hot air loophole' of at least 11 GtCO2e, though these Assigned Amount Units (AAUs) are expected to be useless after 2020.
• To protect the 2030 climate ambition, the EU should permanently cancel at least 2 billion surplus ETS allowances by the end of 2020 and prohibit the use of pre-2020 reductions in the 2030 ESD.
• The Paris agreement requires a robust international accounting system and strict eligibility criteria to ensure only parties with adequate carbon budgets can use international market mechanisms.

APA

Carbon Market Watch (2015). The EU’s hot air – lifting the fog. https://carbonmarketwatch.org/wp-content/uploads/2015/11/HOT-AIR-IN-THE-EU_final.pdf

Chicago

Carbon Market Watch. The EU’s hot air – lifting the fog. 2015. https://carbonmarketwatch.org/wp-content/uploads/2015/11/HOT-AIR-IN-THE-EU_final.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=The EU’s hot air – lifting the fog |date=November 2015 |url=https://carbonmarketwatch.org/wp-content/uploads/2015/11/HOT-AIR-IN-THE-EU_final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2015eus, author = {{Carbon Market Watch}}, title = {{The EU’s hot air – lifting the fog}}, institution = {Carbon Market Watch}, year = {2015}, month = nov, url = {https://carbonmarketwatch.org/wp-content/uploads/2015/11/HOT-AIR-IN-THE-EU_final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }