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Emissions Trading Schemes

December 15, 2011

The issue of human-induced climate change has become one of the most widely discussed and controversial environmental questions of our era. Although polls continue to show widespread skepticism among the American public towards the science, the overwhelming majority of climate scientists agree that rising emission levels of CO2 and other greenhouse gases have contributed at least partially to increasing global temperatures.

The European Union has been a vocal advocate of taking action to reduce emissions and combat the effects of climate change. It was one of the signers of the 1997 Kyoto Protocol, the first major international effort to reduce greenhouse gas emissions. Using 1990 levels as a baseline, the treaty obliged the EU to cut emissions 8% by 2012 and 20% by 2020. Various projections indicate that the EU should be able to meet the 2012 target, despite the fact that performance in terms of cutting emissions has been uneven across member states. Indeed, the largest emissions decreases have been seen in some of the post-communist countries that joined in 2004 and 2007. The decreases in these countries came about largely as a result of the decline of heavily polluting Soviet-era industry and the closure of many factories throughout the 1990’s.

Source: Foreign Policy Digest

Source: Foreign Policy Digest

The EU set up the world’s first large-scale emissions trading scheme, known as the European Union Emissions Trading Scheme (EU ETS). The program was launched in 2005 and grants participants a certain amount of allowances to emit carbon. Installations that meet their targets have the opportunity sell their allowances. The program operates in “phases” that last several years; the first phases ended in 2007. The scheme was criticized for granting too many allowances and therefore not creating enough pressure to reduce emissions. In addition, aviation emissions, a major component of greenhouse gases, were not included in the scheme. Supporters reply that the initial phase was a learning process and that the current phase has incorporated many of the lessons learned in the initial phase. In addition, aviation emissions are expected to be included in the scheme from 2012.

The Kyoto agreement also obligated EU member states to meet certain renewable energy targets. The EU as a whole has set a goal to have 20% of its total energy consumption come from renewables by 2020, although different countries have different targets. Although some countries are on track to meet their interim targets, there is a great deal of variation. According to the U.S. Energy Information Administration, in 2009 Austria got 74% of its electricity from renewable sources while the figure for Sweden was 60%, making these two countries the clear leaders. For a number of countries, however, the figures are below 15%.

For more information on the One State, One World series, please visit http://indianapublicmedia.org/onestateoneworld/.  This episode of One State One World is produced in partnership of WFIU Public Radio and the EU Center at Indiana University.

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