Talk:Assessment on impacts of emission trading on city-level (ET-CL)

Policy relevant decision options - GHG trade

A summary of suggested amendments to the EU ETS for phase III (by comission):

• inclusion/exclusion of small installations: > 25 MW or > 10 kt CO₂ emission/year
• CO₂ emissions from petrochemicals, ammonia & aluminium production to be included
• N₂O emissions from mitric, adipic & glyoxalic acid to be included
• perfluorocarbon (PFC) emissions from aluminium production to be included
• carbon capture and storage (CCS) possibly to be included
• road & ship transport NOT to be included (air transport to be included 2012 onwards)
• land use, land use change & forestry NOT to be included
• centralized allocation of emission permits (total emission cap defined for whole EU instead of national action plans by member states)
• auctioning of > 60 % of permits (instead of distributing all for free)

Not suggested:

• personal emissions trading (in general)?
• different combinations of GHGs & sectors?
• options for including road transport:
  1. emission permits for vehicle owners
  2. emission permits for fuel suppliers
  3. (estimated future) emission permits for vehicle manufacturer's

Main elements of EU ETS after 2013 (from EurActiv.com):

• Capping of total EU industrial emissions at 21% below 2005 levels by 2020 – i.e. a maximum of 1720 million allowances – with total emission allowances cut by 1.74% annually as of 2013. The EU-wide target replaces the current 27 national targets.
• Enlarging the scope of the scheme to new sectors, including aviation, petrochemicals, ammonia and the aluminium sector, as well to two new gases (nitrous oxide and perfluorocarbons), so that around 50% of all EU emissions would be covered. Road transport and shipping remain excluded, although the latter is likely to be included at a later stage. Agriculture and forestry are also left out due to the difficulties related to measuring emissions from these sectors with accuracy.
• Sectors not covered by the ETS, such as transport, buildings, agriculture and waste are to achieve an average GHG reduction of 10% by 2020. To achieve this, the Commission has set national targets according to countries' GDP. Richer countries are asked to make bigger cuts – up to 20% in the case of Denmark, Ireland and Luxembourg – while poorer states (notably Portugal, as well as all countries that joined the EU after 2004 except Cyprus) will be entitled to increase their emissions in these sectors – by up to 19 and 20% respectively for Romania and Bulgaria – in order to take into account their high expectations for GDP growth.
• Smaller installations, emitting under 10,000 tonnes of CO2 per year, will be allowed to opt out from the ETS, provided that alternative reduction measures are put in place.
• Industrial GHGs prevented from entering the atmosphere through the use of so-called carbon capture and storage (CCS) technology are to be credited as not emitted under the EU Emissions Trading Scheme (EurActiv 16/11/07).
• Auctioning: The proposal foresees a huge increase in auctioning as early as 2013. While today, 90% of pollution allowances are handed out to industrial installations for free, the text states that "around 60% of the total number of allowances will be auctioned in 2013". It adds that "full auctioning should be the rule from 2013 onwards for the power sector". This is expected to lead to a 10-15% rise in electricity prices. In other sectors, free allocation will gradually be completely phased-out on an annual basis between 2013 and 2020. Nevertheless, certain energy-intensive sectors could continue to get all their allowances for free in the long term if the Commission determines that they are "at significant risk of carbon leakage", i.e. relocation to third countries with less stringent climate protection laws. Sectors concerned by this measure are yet to be determined.
• The distribution method for free allowances will be developed at a later stage by expert panels within the Commission (through the so-called 'comitology procedure'). The Commission nevertheless says that "the rules may for instance specify that allocations are to be based on so-called benchmarks, e.g. a number of allowances per quantity of historical output". It says: "Such rules would reward operators that have taken early action to reduce greenhouse gases, would better reflect the 'polluter pays' principle and would give stronger incentives to reduce emissions, as allocations would no longer depend on historical emissions".
• Competitiveness: The Directive stresses that the risk of "carbon leakage" – and subsequently, the need for compensatory measures for European companies – is dependent on whether or not an international agreement subjecting all countries to similar climate change mitigation measures is reached. It therefore delays any decision on eventual compensation measures until 2011, when the Commission will have to present a review of the situation. If no global pact is reached by then, some sort of "carbon equalisation system" will be introduced – whether in the form of additional free allocations or through the inclusion of carbon-heavy imports from third countries in the ETS.
• Flexibility and third countries: Assuming a global climate change deal is reached, member states will continue to be entitled to meet part of their target by financing emission reduction projects in countries outside the EU (through the CDM and JIs), although the use of such credits will be limited to 3% of member states' total emissions in 2005.

Policy relevant decision options - city-level decisions

Some points of city-level decision options regarding CC mitigation measures within the Helsinki metropolitan area (picked from YTV climate strategy 2030):

• transport
  • public transport: pricing, speed/smoothness of connections, quality of service
  • urban planning: transport distances, proportion of light traffic
  • emissions: purchases by city, informing of alternative means of transport, privileges to low emission cars, support to car pooling (urban planning, economical incentives)
  • ship transport identified as an issue, but not considered
• land use
  • compact city plans, filling of empty spots within town plan (urban planning)
  • location of workplaces (urban planning)
  • enabling use of renewable energy sources (urban planning)
• electricity consumption
  • guidance about heating/cooling systems (planning, informing)
  • energy efficiency of city's own operations (eco-efficieny as purchase criterion)
  • consumption follow-up & distribution of costs by usage
• heating
  • energy efficiency of new buildings (investment support, informing)
  • change to renewable energy sources (price, investment support, informing)
  • change to district heating (price, investment support, urban planning, informing)
  • city's own solutions
  • service personnel education
• purchases, consumption, waste
  • waste management
  • waste incineration
  • waste sorting
• energy supply
  • efficiency of energy production & transfer, use of return water excess heat
  • renewable energy sources
  • expansion of district cooling
  • decentralized energy production: renewable energy sources (price, informing)
  • expansion of district heating
  • informing and research

CC mitigation in Helsinki (http://www.hel.fi):

decision-making levels

• YTV climate strategy - district level
• energy policy - city level
• energy efficiency agreements - city activity level

actions/decisions

• compact town planning
• communal co-operation
• railway-based land use policy
• public transport support
• light traffic support
• traffic management & pricing (e.g. congestion charges)
• low emission vehicle support
• low energy buildings (new -70% & renovations -20%)
• investment support, funds
• low energy town plan ares
• construction guidelines
• property release terms
• energy savings campaigns (city personnel, schools, citizens)
• home appliance energy efficiency guidance center
• ecoefficiency guidance center
• low energy innovation support
• Reduction of fossil fuels
  • use of waste heat, reduced consumption
  • renewable energy sources (wood, wind, heat pumps, sun, biogas)
• district heating/cooling support