CBI calls for EU to set 2030 emissions target
The business lobbying organisation, the Confederation of British Industry (CBI), has called on the EU to stop "short-term tinkering" with the carbon market and clarify political agreement on a 2030 emissions target.
In its policy brief, 'Targeting 2030: Giving the EU ETS a Long-term Future', the CBI argues that a successful carbon market is essential if Europe is to create sustainable and secure growth, but that uncertainty surrounding the EU's Emissions Trading System (EU ETS) are hindering investment.
The CBI claims the EU ETS is not delivering as it only has an emissions cap until 2020. It argues that it is necessary to implement a 2030 emissions cap set in-line with an EU-wide emissions target for the same year in order to give businesses the confidence to ramp-up investment.
The brief recommends that the European Commission's current proposal, to change the timeline on which emissions permits are auctioned, known as 'backloading', will not work.
CBI director for business environment policy Rhian Kelly said: "Investors are ready for the low-carbon race, but right now they can't see the finishing line. Europe urgently needs a 2030 carbon target to give investors the confidence to get going.
"Emissions trading is key to unlocking business investment in low-carbon technology to help get the economy growing. But at the moment the carbon market is not delivering for Europe because of its short-term focus.
"Without a long-term plan, the short-term changes being debated now are just tinkering with the market and won't do anything for investor confidence."
The CBI also argued that some crucial energy-intensive industries are at risk of 'carbon leakage', where investment in Europe is deterred by the costs of the EU ETS, flowing instead to countries with lower environmental standards.
Kelly added: "There is an important section of the business community not being considered in the current carbon market reform proposals.
"Energy-intensive businesses make a direct and significant contribution to economic growth and are a vital part of the low-carbon future. The Commission must make improving support for these businesses an integral part of its carbon market reforms."