Enviros argue emissions trading is working in Europe

By Keith Laing - 10/17/12 12:49 PM ET

A European Union requirement that companies trade credits for carbon emissions they emit is already working, an environmental group argued Wednesday.

The New York-based Environmental Defense Fund (EDF) said the new rules, which are being applied to airlines for the first time this year, have already reduced emissions and "sparked innovation" in other sectors.

“What we found very clearly is that after a three-year trial period and almost five years of full operation, the world’s first global warming cap-and-trade program is doing exactly what the EU designed it to do — cut dangerous emissions, spur the deployment of low-carbon innovation and do so at low cost,” EDF Attorney Alexa Hanafi said in statement about a report issued by the organization.

The addition of the airline industry to the regulations has been vocally opposed by both lawmakers and U.S. airlines, despite being in its first full year of implementation.

Under the rules, airlines now have to reduce their emissions from 2006 levels by 3 percent by 2013 and 5 percent by 2020.

The enforcement mechanisms and fines for noncompliance are similar to cap-and-trade proposals environmentalists once tried to push in the United States.

The EDF's Hanafi said the fears of opponents to the European emissions trading system, which are similar to objections that have been raised in the U.S., have not come to fruition. On both sides of the Atlantic Ocean, critics argued that the emission rules would place undue burdens on businesses and stifle economic activity.

But Hanafi said, “[W]hile many people are acutely aware of the global recession, Europe’s struggling economy and today’s low market prices for EU emission allowances, we found that there is another reality that is less well-known: despite some initial challenges, the EU Emissions Trading System is successfully reducing the EU’s global warming pollution, and offers real lessons to other countries and states seeking to decouple economic growth from emissions growth.”

The EDF Director of Strategic Climate Initiatives Derek Walker, who is based in California, added, "[L]essons from the EU’s Emissions Trading System have relevance all over the world and nowhere more so than in California, where regulators and policymakers have been working hard to proactively adapt to the challenges revealed by the EU’s early years of implementation.

“The bottom line is that emissions trading has been an economic and environmental success in the EU and it will be in California too," Walker said.

U.S. airlines have said they will not have to begin making payments for emissions on flights to countries within the EU until April 2013, but they have asked both President Obama and Congress to step in to prevent the rules from being applied to them.

The House has passed a bill to block the EU emission trading rules from being applied to U.S.-based airlines, but a similar measure has thus far been stalled in the Senate.

Transportation Secretary Ray LaHood has called the European emission rules "lousy," but he has said the Obama administration will defer to Congress for a formal ban.

The EDF report can be read here.