the fiasco of the European system

the fiasco of the European system

2023-05-31 05:30:09

The decarbonisation of industries has long been a headache for the European Union (EU). Nearly twenty years after their creation, the “rights to pollute” distributed free of charge to the most polluting factories of the Old Continent are showing their limits and will be reformed, as voted by the European Parliament on April 18, 2023.

The EU has given itself ten years to abolish this system of CO quotas2, gradually replacing it with a carbon adjustment mechanism at its borders, which looks very much like a carbon tax for non-EU manufacturers wishing to import their products from us. The switch between the two systems will take place in 2034. It endorses the idea that in terms of the fight against global warming the results, for the time being, are not there.

At the origin of this system of “rights to pollute”, there was a very clear intention: to encourage companies to reduce their greenhouse gas emissions, by having them cash out as soon as they exceeded the ceilings announced to the authorities. For almost twenty years, the system has been operating in this way, but in a watered down way: instead of a tax, the EU created in 2005 a market place where the CO2 is exchanged like money. “The company must be led to tell itself that polluting is expensive and that it must adapt. This is the theory, but in reality the system has been misguided”sums up Julien Hanoteau, professor of economics and sustainable development at the Kedge Business School in Aix-Marseille.

If the emissions quota trading system (SEQE, EU-ETS in English) has so far proved ineffective, it is partly because industrialists have been collecting, during all these years, “duties to pollute” free; and because they were able, in addition, to derive financial profits from it, which had not been envisaged initially.

The investigation that we carried out over eight months, with the financial support of the Investigative Journalism for Europe (IJ4EU) fund, on the cement and steel sectors in France and Spain shows how the free quotas have led to few concrete results. , despite the announcements and promises of manufacturers.

Low reduction in emissions

Over the past ten years, after the devastating effects of the 2008 financial crisis, CO emissions2 of the two sectors that supply most of the materials to building and public works contractors have decreased very little, with regard to the pollution they cause in the atmosphere.

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