Mobility to be included in CO2 trading scheme?
In a joint advice presented early this year, various councils concluded the current Dutch policies for CO2 reduction won't suffice by far. European – or preferably worldwide – forms to pay for mobility are needed. The introduction of an emission trading scheme for all mobility is a serious option. But should there be a seperate scheme for mobility or is mobility to be included in one overall CO2 trading scheme?
The Dutch Association of Environmental Professionals (VVM) held a seminar on March the 12th, discussing the publication Every journey has its price. This advice was published by councils of the Dutch Ministeries of Transport and Spatial Planning in cooperation with the Dutch Energy Council.
One of the discussions during the seminar dealt with the question whether or not mobility should be included in the European Union (EU) emission trading scheme (ETS). Another option is a seperate trading scheme for mobility.
Although everyone at the seminar agreed that in the long term there will have to be just one scheme for all sectors, not everyone wants to integrate mobility into the EU ETS right away.
Green4sure
During the seminar, the Netherlands Society for Nature and Environment presented its own views as laid down in the publication Green4sure. A representative, Maarten van Biezen, pled for higher ambitions and the implementation of both levies and a seperate emission trading scheme for mobility (air and waterway transport excluded).
Why a seperate scheme? One trading scheme for all sectors would, according to Nature and Environment, scare away industries, hamper the transition of mobility and be unclear to citizens. Furthermore, one general scheme would not serve energy security, clean air, the export of knowledge and the possible gains – in spite of the high price – for society. And if one sector within a general scheme were to use up all emission rights, we’d end up with competition between different sectors.
Just as bad
Economist Erik Verhoef summarized the question as follows. “It all boils down to whether you consider emission of one kilo CO2 by mobility to be worse than, or just as bad as a kilo CO2 emitted by any other source, like central heating.
If you want seperate sectors because you fear industries will leave, that means you have more sympathy for industries. In that case, a solution could be to grant industries more emission rights than mobility. It is one of the first tasks to establish the optimal initial division of rights.”
This emission trader is still noticeably unsure who to trade with and what language to use.
Turn up the heating
A disadvantage of including mobility in the ETS could be that if one sector turns out to do better than expected, in terms of CO2 reduction, other sectors could become more lazy. On a consumer level, people could be tempted to choose inefficient methods of transport if they got the impression, from encouraging results in other sectors, that it went the right way with the environment. Or, as manager energy transitions for Shell Netherlands, Ewald Breunesse, pointed out, you can turn up the heating if you decide not to take the car as often as you do.
Vice versa, if one sector would prove to be unable, despite all efforts, to attain its emission reduction goals, in an overall scheme that would leave room for compensation. Less emission rights could be dealt to a sector that is able to reduce its emissions still further.
Better-than-expected or dissapointing results, could become an argument in favour of respectively excluding mobility from the ETS, or including the sector.
Why separate schemes?
One of the participants in the VVM seminar argued that the only logical differentiation would be to separate emissions that can be captured, from emissions into the atmosphere. But the question remains: why would you want to seperate systems?
According to another participant, a reason for seperate systems might be the possibility to stimulate mobility by different transport modes. Van Biezen added that the transportation sector could well be willing to pay more.
Ceiling
But, as Verhoef observed, that is actually a reason not to have different systems. Verhoef defended the consumer’s freedom to choose how to ‘spend’ his emission rights. There must, however, be an emission ceiling.
In a system of emission trading, prices are unsure, but the ceiling is fixed. On the other hand, in a system with levies, prices are fixed, but there is no ceiling. The second option clearly provides no guarantee the environment will improve. Willingness to pay could result in a further increase of emissions. Try to explain that to the next generation.
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