German chancellor Angela Merkel called on Saturday for the EU ETS to be expanded beyond Europe to help level the global playing field on climate protection.
“The EU ETS would be more effective if it could be extended to regions beyond Europe as this could level the playing field worldwide,” Merkel said during a weekly podcast ahead of the annual high-level Petersberg Climate Dialogue in Berlin on Monday and Tuesday.
“It would also enable us to extend certificate trading to more areas,” she added.
The EU ETS is the world’s biggest emissions trading system and regulates over 12,000 installations in the 28 EU nations plus Norway, Leichtenstein and Iceland. The bloc is in advanced talks to link with Switzerland’s system in the next three years, though an agreed tie-up with Australia was cancelled after a new Australian government opted to dismantle the country’s mechanism.
EU PRICE SIGNAL
Merkel said the ongoing ETS reform process is very important because “at the moment there is not the right price signal.”
She said this was due to lower-than-expected economic growth, which the MSR reforms aim to fix by ensuring for the long term economic growth and the availability of a reasonable proportion of allowances.
“It is therefore necessary that certificates are taken out, then the price will rise,” she said, adding that once this happens, the “pressure to innovate” will rise again.
Merkel hosts the Petersberg event as her government wrangles over a proposal to help meet a shortfall towards Germany’s national 2020 emission cut target by requiring the older coal-fired power plants to pay penalties charged in EUAs.
She said the best way to plan for the future would be to get a global climate deal at the year-end UN climate conference in Paris which would require clearly defined national objectives (INDCs) being submitted promptly.
“And at the same time we need a financing instrument. Otherwise, the developing countries and the countries most affected by climate change will not agree to a deal,” she said.
Industrialised nations have agreed to provide $100 billion a year in climate financing by 2020 to help poorer countries tackle climate change but current cashflows are falling well short of those levels.
Merkel said more progress on this issue could be made at the annual high-level Conference on Financing for Development, to be held this year in Addis Ababa, Ethiopia on July 13-16.
On Sunday, EU climate and energy chief Miguel Arias Canete and Norway’s environment minister Tine Sundtoft were due to co-host an informal roundtable discussion in Berlin to discuss priorities in the run-up to the Paris conference.
“The Paris climate conference is just seven months away. We need to ensure it delivers an agreement that will bend the global emissions curve downwards. That means contributions to the new agreement must be as ambitious as possible and cover the broadest geographical area. If this agreement is going to make a difference to the climate, we need the whole world fully on board. We cannot fight climate change on our own. That is something we can only do together,” said Arias Canete in a statement on the European Commission’s website.
Ministers and high-level representatives from Europe, Africa, Asia, Latin America and the Pacific Islands will join the discussions along with UN climate chief Christiana Figueres and Mary Robinson, the UN Secretary General’s special envoy for climate change.
The Petersberg Climate Dialogue is an informal meeting of ministers and representatives from around 35 countries.
Most events are closed door but German environment minister Barbara Hendricks and French Foreign Minister Laurent Fabius will open the conference at 9am Berlin time on Monday in a webstreamed address.
Chancellor Merkel and France’s President Francois Holland will also give webstreamed keynote speeches at 11am Berlin time on Tuesday.
By Ben Garside – email@example.com