EU Draft Plan Targets Free Carbon Credit Cut For Most Industries (reuters.com) 70
An anonymous reader quotes a report from Reuters: Most industries covered by the European Union's carbon market would see free credits cut by the highest possible rate over the next five years under draft plans, potentially costing some of the biggest polluters millions of euros. The carbon market is the EU's main policy for cutting greenhouse gas emissions, by forcing power plants and factories to buy credits to cover their emissions. These credits are trading near record highs as speculators have bought into the idea that tougher EU climate targets will boost demand, while analysts predict further rises.
Although industry gets some free credits, to help avoid "carbon leakage," when companies relocate outside the EU to avoid carbon costs, the bloc has agreed to reduce them over the next decade to curb pollution and meet climate goals. EU industry emitted around 570 million tonnes of carbon dioxide (CO2) equivalent under the carbon market regime last year. Buying enough credits to cover those emissions would cost roughly 16 billion euros at today's EU carbon price. Of 52 industrial products deemed to be at risk of "carbon leakage," 43 will face the maximum possible reduction in the benchmark which determines their free credits over the next five years, a European Commission draft seen by Reuters shows.
Those sectors would receive 24% fewer free credits on average over the period 2021-2025, per tonne of product produced, compared with the amount they would currently get. Industries whose free credit benchmarks would be cut at the maximum rate include producers of refinery products, coke, iron casting, lime, ammonia, and pulp and paper products. Other sectors would face smaller curbs. Free credits for primary aluminum and hot metal used in steelmaking would be cut by 3% over 2021-2025, the minimum possible reduction rate.
Although industry gets some free credits, to help avoid "carbon leakage," when companies relocate outside the EU to avoid carbon costs, the bloc has agreed to reduce them over the next decade to curb pollution and meet climate goals. EU industry emitted around 570 million tonnes of carbon dioxide (CO2) equivalent under the carbon market regime last year. Buying enough credits to cover those emissions would cost roughly 16 billion euros at today's EU carbon price. Of 52 industrial products deemed to be at risk of "carbon leakage," 43 will face the maximum possible reduction in the benchmark which determines their free credits over the next five years, a European Commission draft seen by Reuters shows.
Those sectors would receive 24% fewer free credits on average over the period 2021-2025, per tonne of product produced, compared with the amount they would currently get. Industries whose free credit benchmarks would be cut at the maximum rate include producers of refinery products, coke, iron casting, lime, ammonia, and pulp and paper products. Other sectors would face smaller curbs. Free credits for primary aluminum and hot metal used in steelmaking would be cut by 3% over 2021-2025, the minimum possible reduction rate.
16 billion euros (Score:2)
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>> Wow, only 16 billion euros to save the world. I didn't realise how cheap it would be.
(Yes, I'm going to pretend this isn't sarcasm - clearly this comment was penned by someone unaware of the costs and profits of major industries)
It can be surprising how small penalties can be to be effective.
It's a pity this is not being applied more widely. Australia dumped its carbon trading scheme some years back due to an idiot campaigning against it. (He in fact became prime minister, incredibly, but as his on
Re:16 billion euros (Score:5, Informative)
I don't know what America is doing, but I suspect something nowhere near as effective
Basically the US is doing less than nothing, and is actively working against any change. Many of the EPA anti-pollution regulations have been rolled back under the current administration because they are somewhat inconvenient for big polluters, and Trump keeps openly ridiculing renewable power ("solar power is completely useless because it's dark at night!", "windmills will instantly destroy your property values, and their sound will give you cancer!" (yes, he really said that). Rules from the Obama administration mandating more fuel efficient cars have been rolled back at the federal level, and the Trump administration has been suing states like California for trying to keep the former more strict requirements for cars sold in their state.
The president keeps trying to push for increased coal and oil dependence instead, because he is convinced that climate change is just a Chinese hoax aimed at making America waste money to fix a non-existent problem. It would almost be funny if it wasn't so damn sad.
Huh? Why the assumption that government... (Score:5, Insightful)
rules and regulations are directly tied to emissions? Hint: they're not.
In 1960 the US emitted 2.8 billions of tonnes of CO2 per year, by 2016 when Trump was elected we were up to 5.31 billions of tonnes of CO2 per year (about double in 60 years). In 2019 we were up to 5.32, which is nearly but not quite a flattening.
Over the same time, China went from 0.78 (in 1960) to 9.71 (in 2016) billions of tonnes of CO2 per year (about 12 times as much in the same 60 years) In 2019 China was up to 10.33, a difference of 0.62 in the last 3 years (far more than the US increase of 0.01 in the same time).
Over the same time, The EU went from 2.65 (in 1960) to 3.50 (in 2016) billions of tonnes of CO2 per year (a much shallower slope than the US in the same 60 years) In 2019 the EU was up to 3.39, a difference of 0.11 in the last 3 years (far more than the US increase of 0.01 in the same time).
In other words, in the Trump years, even with the reduced regulations, US emissions have grown far less than China's or the EU's. This is all just in gross tonnage, not tweaking for populations, industrial output, or any other thing a person might try to use to justify things - it's just the raw total amounts each region is emitting. For all it's growth over the years, China does not become naturally more-efficient and clean because it's a top-down managed society and such hands-on policy dictation is contrary to naturally-occurring processes that would drive efficiency - there are simply no genius policy makers who can plan more efficiency than a marketplace will naturally drive. The flatter slope of the EU is actually explained more by the basic and flatter economic growth (relative to the US) over the same time period, rather than by some greater planet-hugging morality.
There's no magic here, it's simply the case that the US economy tends to be more free-market and thus rather efficient, so when a thing works out to be best it gets adopted at a rate the economy self-selects to be the best rate. Nobody had to force Americans to move from horse-and-buggy to cars with a government mandate, the economy went that way as the tech lined-up and became more efficient and safe; it will similarly make a shift to electric cars as they become the proper economic thing, indeed this is already underway. The US economy is cleaning up its emissions naturally, over time, with or without the artificial driver of government regulations, simply based off of the improved technology that the market is producing.
It always amazes me that techie people who claim to believe in Darwinian evolution often fail to see that economics has similar mechanisms - and that left to its own a free market will automatically derive an optimal solution as lesser-solutions lose out to better ones by natural selection. People who demand government actions and then celebrate any effects they see are a bit like the purveyors of GMO crops. They monkey-about with a system and get a change and then celebrate their genius without ever truly knowing precisely what they've done and why it had the effects it did, but they're happy to sell it to the world. Any perceived benefit is observed in a vacuum, without consideration of what might have occurred without those actions. Government regulations have a nasty habit of actually locking-in behaviors, technology and systems which end-up being worse than what naturally arises later - lookup "regulatory capture" which is a very real and very related problem.
Re:Huh? Why the assumption that government... (Score:5, Informative)
Over the same time, The EU went from 2.65 (in 1960) to 3.50 (in 2016) billions of tonnes of CO2 per year (a much shallower slope than the US in the same 60 years) In 2019 the EU was up to 3.39, a difference of 0.11 in the last 3 years (far more than the US increase of 0.01 in the same time).
According to your figures, the EU decreased by 0.11 billion tons from 2016 to 2019, not increased. Which ruins the rest of your argument.
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You are cherry picking timeframes.
For example the EU had a major drop after the 2009 financial crisis, which has now somewhat recovered. The overall trend is a stream line downwards, but because of that sudden drop and arbitrary 3 year timeframe the drop was only 0.11 billion tonnes. Oh yeah, it was a drop, not an increase.
Same with China. The vast industrialization that China has seen since the 60s happened in the US too, just earlier so it's not included in your comparison.
Every country is on a curve as t
Re: Huh? Why the assumption that government... (Score:2)
I fail to see how a free market would gravitate to an optimal solution if such optimal solution is not the lowest cost one. If polluting has no cost (dumping in the local river), then the free market result will have lots of crap dumped in rivers, the atmosphere, etc. What else but government should set and enforce the cost of going against the common good? Not
Re: Huh? Why the assumption that government... (Score:2)
Bloody spell check...
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Free markets do not develop optima solutions. They develop monopolies.
Otherwise we had electric cars since 50 years.
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But ORANGE MAN BAD, right? You guys watch too much CNN and are being led around by your nose.
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And yet, the US managed to outperform the Paris Climate targets, better than their most vociferous critics who made sweeping promises that they've failed to keep.
Funny, that.
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Basically the US is doing less than nothing, and is actively working against any change.
And yet US CO2 emissions have consistently fallen up until the last survey from last year. Imagine what the US could accomplished if they were doing *actually* nothing!
https://insideclimatenews.org/... [insideclimatenews.org]
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Interesting.
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Carbon trading is a terrible idea. Cap and tax, don't cap and trade. Trading only rubber-stamps pollution, it doesn't eliminate it. What we want is a reduction, not just creative accounting.
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That might be what YOU want, but the people creating the system obviously want to be able to move money around.
And the US (and China) will laugh (Score:2)
I don't think the US (and China) will laugh (Score:5, Interesting)
No luck. FTA: "The Commission will put forward proposals to apply carbon costs to polluting imports next year, to shield EU firms from being undercut by countries with weaker climate policies"
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Or the UK. The EU is going to get even stricter due to the threat of the UK turning itself into a bargain basement low cost, low wage tax haven off its coast.
Move all production to China. Problem Solved. (Score:2)
Free money.
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Wow, what a great idea. I'm sure they will move all coal power plants to China, ship back electrons in containers.
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I'm sure they will move all coal power plants to China, ship back electrons in containers.
No, not container ships. They will use HVDC.
China-EU Transmission Link [europa.eu]
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Looking at the report it would be quite difficult to accomplish. A lot of different countries to cross. many of them unstable or with poor infrastructure. Africa would be a better source. It's closer and has a big potential for solar. Some links already exists and more are being build.
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Mongolia is already connected to the European- Asian supergrid, howeveer with AC at the moment.
North Africa is not realy famous for stability either.
And regarding sun: Cina had the Gobi desert.
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EU will impose carbon costs to make sure that this does not happen.
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EU will impose carbon costs to make sure that this does not happen.
They are doing that now. It seems their current plan is to make business just barely profitable enough so they don't leave.
And it's the consumers who pay in the end anyway, so the joke is on them.
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Yeah built it in China, charge batteries, and then ship the charged batteries to Europe. Then send the empties back to China for a refill. I don't see any problem with that proposal. Not one.
Good to try. Better to succeed. (Score:2)
Saving the environment is certainly a great and admirable goal. The difficulty with approaches such as those in the European Union is that demand for energy isn't particularly elastic. Driving costs up for energy producers in first world nation reduces energy production in those same countries.
Consequently, energy producers in less developed nations gain market share and take up the slack. Given that less developed nations tend to have far fewer environmental regulations. Global pollution increases.
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Nope. EU will impose extra carbon taxes on polluting producers to shield their industries from thos trying to omit EU carbon standards. So: pollution will drop - unless others are willing to pay for the EU Green Deal.
Re: Good to try. Better to succeed. (Score:2)
They could but they don't. Last I heard, Germany was working with Russia to build natural gas pipeline into Germany from Russia. Russia will become one of the largest energy importers into the EU. Russia is not exactly a bastion of radical environmentalism.
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Nope. EU will impose extra carbon taxes on polluting producers
That is illegal for WTO members.
Tariffs can not be imposed based on the method of production.
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If you read the article, you will find a sentence at the bottom the states the intention of the EU to do this.
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Nope. EU will impose extra carbon taxes on polluting producers
That is illegal for WTO members.
Tariffs can not be imposed based on the method of production.
It's not based on a method of production, it's based on carbon output. In other words, if you can find a way of producing steel with coal, but then capturing that carbon and turning it into plastic then you are golden. If, on the other hand, you use electricity from windmills, but the windmills take more oil to produce than the energy you output then you are going to have to pay taxes.
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That's why it's a carbon tax, it doesn't matter how you make it only how much carbon the product emits during its entire lifecycle.
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It is not based kn method of production but on pollution.
Need to cut at the source (Score:2)
The carbon credit system with all its exceptions and hypothetical compensation schemes is not going to work.
If a house with gas pipes is on fire, you don't go in and close the supply of each individual appliance. You close the main valve.
The main valves in the carbon cycle are Shell, Exxon, BP, Saudi Aramco etc. We need to close them. Gradually over the
years of course, but swiftly and determined.
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The main valves in the carbon cycle are Shell, Exxon, BP, Saudi Aramco etc. We need to close them.
The first step in closing them is to reduce demand for their products.
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Granted, but as you say, it's the first step.
Consider this: If you reduce supply, prices rise with a few beneficial effects:
* Alternatives to fossile fuels become more attractive.
* Extractors become more profitable and the money can be used to further
offset current and past emissions.
It also strikes me that cutting supply is conceptually (not politically) easier and more fair
than regulating the countless industries on the demand side. And after all, if we really want
to reduce emissions, supp
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The carbon credit system with all its exceptions and hypothetical compensation schemes is not going to work.
Except that it already is working by pricing carbon above greener alternatives and thus pushing demand towards the now cheaper latter solution.
The main valves in the carbon cycle are Shell, Exxon, BP, Saudi Aramco etc. We need to close them. Gradually over the
years of course, but swiftly and determined.
Funny you mention those names. I was involved specifically in an expansion project for one of those companies in Europe during the evaluation stages. The Carbon Credits specifically pushed hydrogen generation to a more expensive but greener technology as a result and it was projected that the entire expansion project would have ~20% less of a carbon impact as a resul
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Except that it already is working by pricing carbon above greener alternatives and thus pushing demand towards the now cheaper latter solution.
According to https://www.worldometers.info/... [worldometers.info], we went from 25.6 to 35.8 Gt CO2
from 2000 to 2016 alone. Honestly, do you think this is even nearly enough?
I would love to believe that 'it is working', but unfortunately the numbers seem to speak a different language.
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According to https://www.worldometers.info/ [worldometers.info]... [worldometers.info], we went from 25.6 to 35.8 Gt CO2
from 2000 to 2016 alone. Honestly, do you think this is even nearly enough?
Well two points:
1) The question wasn't if it was nearly enough, the question was if it was working. For the former I don't think we're doing enough. For the latter the evidence is clear that it is working to reduce emissions.
2) Let's split this in 3 points.
a) How dishonest do you need to be to apply an EU scheme effectiveness to *global* CO2 figures? Total emissions for the EU have decreased since the 90s?
b) How dishonest do you need to be to look at figures that cover a full 13 years before the scheme even
EU draft plan to eliminate industry in Europe (Score:1)
Because that is what will happen.
Re:EU draft plan to eliminate industry in Europe (Score:4, Insightful)
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Which is why the tax the imports.
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Industry is 19% of US GDP. For EU it's 25%. If EU is actively trying to destroy it's industry why it's still relatively bigger then industry in US?
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Because it takes some time for a draft plan to go into effect, obviously.
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You do realize that this policy was in effect for quite some time, right? They are just applying maximum limits allowed by it. So it didn't destroy EU industry for many years (just like other environmental regulations didn't) but just you wait. This time they will get it.
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So you are saying the article is wrong, and new limits are not being imposed?
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It's right in the summary. Imagine that your contract says, your landlord can increase your rent by a maximum of 5% every year. Now your landlord says that during the next 5 years, he actually will increase it by 5% every year.
This what EU is doing. The policy was there for some time now. They were increasing the limits all the time already. Now they saying they will actually increase them a the maximum rate possible.
So do you see now how this is not something new and the industry is already dealing with it
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Your logic is flawed. If you were correct, then threatening someone with a knife is just as harmful as actually slitting their throat: the policy (or threat) was already in place, nothing has really changed because you are now implementing it as you said earlier.
Also, note that the goal is to discourage pollution. There are several ways out for industry:
- Pass the cost on to their customers. Products from China will get even more attractive, leading to loss of income and eventual closure.
- Reduce pollution
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The EU is not destroying its industry, except for coal mining.
It sets up regulations that force the industry to reinvent itself, reducing pollution and emissions.
That usually is achieved by better efficiency, using less energy (which saves money), and renovations/inovations often lead to reduced mnapower or increased output to, which means more profit.
It doesn't cost them anything! (Score:1)
There is a difference between somebody taking more money from me,
and me not taking as much money from somebody else anymore.
The cost was part of their business.
They just mooched on us, and had us pay their damages.
As always with ventures that put profit above advancing humanity, improving well-being and wealth of humanity, or just having a goddamn conscience and doing the right thing because it is advantageous beyond the next quarterly profits.
They shall pay their due costs. And they should also pay back wh