Today Sandbag was invited to submit oral evidence to the Parliamentary Select Committee for Energy and Climate Change for their hearing on the EU Emissions Trading Scheme.
An audio recording of the session is available [here](http://www.parliamentlive.tv/Main/Player.aspx?meetingId=8968 “”), with Sandbag’s remarks commencing at 11:32am, following evidence from our esteemed colleagues Professor Sam Fankhauser (LSE) and Professor Michael Grubb (Cambridge) in the earlier academic session.
Sandbag was invited to submit oral evidence on the back of our earlier written submission which can be read in full [here](http://www.sandbag.org.uk/site_media/pdfs/reports/Sandbag_EU_ETS_memorandum_locked.docx “”), drawing heavily upon our research in our report [Buckle Up!](http://www.sandbag.org.uk/site_media/pdfs/reports/Sandbag_EU_ETS_memorandum_locked.docx “”)
As outlined in the summary introduction to our written evidence, our chief points were:
– In principle the EU ETS is an effective instrument to deliver low-cost abatement and provide maximum flexibility for the sectors it covers, but in practice the ETS carbon budgets have been consistently set too high. Policymakers need to revise the caps downward.
– For the instrument to fulfil its potential and align with Europe’s longer term goals, Sandbag recommends that 1.7Gt be set aside from the permits auctioned in the Phase 3 budget and the trajectory be amended to a 2.4% annual decline at the earliest opportunity.
– Despite being oversupplied to date the EU ETS price signal is estimated to have driven some 330Mt of CO2 to date. Phase 3 will ensure 2.7 billion tonnes of CO2 are saved against current business-as-usual projections for 2013-2020.
– While the future of the Kyoto Protocol is uncertain, domestic and regional cap-and-trade schemes are multiplying, with several comparable schemes in place already (New Zealand, Switzerland, Eastern States of the USA) and still more due to be operational between 2012-2016 (California, Australia, South Korea, Ukraine and even China).
– The barriers that inadequate international climate action present to more ambitious European climate policy, or that inadequate European action present to UK climate policy, have been exaggerated by competitively-exposed and energy intensive industries. These industries are offered extensive protections by the Emissions Trading Directive in Phase 3 and are currently profiting from the scheme in Phase 2.