|
From Source URL click on Download the document (PDF) for FREE
Now that the EU emissions trading scheme (EU ETS) has come into operation and the first round of allocation has been completed, discussions have begun on how to adapt and amend the scheme in light of these initial experiences. The first phase (2005-07) currently underway was intended to be a pilot phase allowing for ‘learning by doing’.
Adaptation and review will be undertaken in two steps. In the first step, changes can be introduced in the short-term implementation phase, especially to national allocation, based on the experiences of the first round of allocation. In the second step, as mandated by the Directive,
a formal strategic review will be conducted by the European Commission, to begin no later than the end of June 2006.
This CEPS Task Force has addressed the first step, i.e. issues related to short-term implementation in two separate reports. This present report (Part I) focuses on harmonisation requirements (including resolving the Annex I definition of installation), consistency of allocation methodologies across member states, transparency of national allocation plans (NAPs), unilateral opt-ins for other gases and activities, and monitoring, reporting and
verification requirements. A Part II report, to be published in the autumn 2005, will examine more fundamental topics, such as economic impacts, power market structure, effects on investment and the potential inclusion of aviation,, which lie at the interface with the formal strategic review (as is indicated in section 1.3.)
After taking stock of the EU ETS, the report examines the need and potential for short-term improvement and makes concrete, operational recommendations to the EU member states and the European Commission.
The report does not provide a detailed analysis but rather a description (in section 3) of marketdevelopment issues, such as registry management; legal, taxation and accounting issues; the scheme’s relationship with the relevant financial services regulation; and potential constraints
due to the Commitment Period Reserve.
Looking ahead, this CEPS Task Force will not deal with the formal strategic review in 2006, i.e. the second step of the EU ETS review. This analysis will be undertaken by a separate CEPS Task Force to be launched in the end of 2005. Its report will deal, inter alia, with allocation methodologies for the third phase, the expansion of the scheme to new sectors and gases, the possibility to link with non-EU trading schemes, the relationship with the renewables Directive and also possible negative economic impacts including investment disincentives.)
|
