CERE's Runar Brännlund advise against changing the amount of emissions permits during a trading period with the argument that the price is too low.

In a recent debate article in Dagens Nyheter Runar Brännlund is commenting on an article by the Swedish environment minister Lena Ek regarding the European Emission Trading Scheme (EU-ETS). Lena Ek argued that the current price of permits is too low and a rapid reduce of the amount of permits would be necessary in order to reach the long-term climate target.

Brännlund however claims that it would be unadvisable to suddenly change the rules for the agents since this could jeopardize the credibility of the entire system. If EU now redraws permits when the price is low, it is not too unlikely that this will also happen in the future when the price is low. This means that firms taking actions in order to reduce emissions, which in the long run result in reduced demand for permits and lower prices, is punished with a higher price via political manipulations.

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EU initiative does more harm than good

"It is of great concern that EU gradually undermines the efficiency of the emission trading system by introducing new incomprehensible control measures. "

Runar Brännlund writes in an article in Second Opinion that he is critical to the goals introduced by EU to reduce the use of energy and increase the share of renewable energy. The European Emission Trading Scheme (EU-ETS) is a good system that can help EU achieve the emission targets cost efficiently. To introduce additional goals regarding energy which in the end aims at reducing CO2 emissions, is pointless and implies that EU does not fully believe in their own system. Specific targets for energy efficiency and energy use shift the focus from the real problem, the greenhouse gases.

Read the article (only in Swedish)