All About The Money – Circling Around Price Fixations of Emission Permits.

In their second session, the Council of the European Union continued to discuss the ETS reform and particularly the issue of price fixations. Views were still split on the issue and no concrete proposals for collaboration made. Denmark emphasised the importance of competitiveness, Sweden was all in for supporting innovation and Spain proposed not only to create an innovation fund, but also an additional modernisation fund, though concrete plans for financing these were rare. Especially the delegates of Italy, France and Slovakia seemed to repeatedly clash in their opinions, with the debate becoming a little more heated at times. At one point, France requested that “Slovakia should stop complaining about Italy”, siding with Italy in its proposal to extend funds for innovation.

It remains open whether a price corridor on emission permits should be part of the ETS reform or not, we hope for the debate to move forward today.

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Money Talk Divides the Council…

The delegates started off the conference with a session on topic A, “The Reform of the European Union Emission Trading System”. Points discussed were what a reform could look like, how carbon leakage can be avoided, and the fixation of prices of EU ETS permits, amongst others. In the vivid debate, two opposing position emerged: First, several countries supported the introduction of a system with fixed prices, amongst them the delegate of Slovakia. One of the arguments in favour of a price fixation was that it allows economically weak member states to have a stable income, and also the access to other funds was claimed crucial. The second position, as presented by e.g. the delegate of Sweden and the delegate of Denmark, was that private investment should be encouraged and therefore fixed prices would be an obstacle. The delegate of Sweden suggested that reducing permits on markets could be an effective measure to fund innovation and alternative energies, in order to reach the goal to become carbon neutral.

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An interesting question was raised by the delegate of Latvia, who asked if economy or ecology should be the prime concern of the ETS reform. An unmoderated 10-minute caucus followed at the final part of the session. In conclusion, the delegate of Slovakia argued that the economy has to be considered for protecting the environment and the delegate of Belgium called for immediate action, otherwise European businesses would suffer. The Debate was adjourned and will continue on Friday.