EU ETS: EU's Tool to Combat Climate Change - Essay Sample

Introduction

The EU Emissions Trading System (EU ETS) is one of the initiatives pursued by the EU to counter harsh climatic conditions around the globe. It traces its roots in the Kyoto Protocol, a treaty adopted in Japan in 1997 and enforceable by United Nations member states and EU member states with the main aim of curbing dangerous climate change (Shishlov, et al, 2016, p.771). I find this policy initiative worth analyzing because it is a central tool in the EU's efforts to combat climate change. The policy initiative also touches on a prominent issue of climate change that concerns almost every country.

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Furthermore, greenhouse gases have become a global challenge as every state tries to avoid loss of marine and human lives to the dangerous impacts of gases such as carbon dioxide, nitrous oxide, and perfluorocarbons. Besides, as countries become more industrialized, higher greenhouse gas levels are released to the atmosphere. If we do not control the emission levels of these gases, the future of the whole creation will be at stake. The EU Emissions Trading System addresses this issue. Henceforth, the initiative is appropriate for debates on climate change policy.

The analysis of this policy initiative will use the Process-tracing method because it looks at important events surrounding the policy and the key actors involved in the plan (Vigar, et al, 2011, p.469). The method will aid us in understanding the evolution of this policy initiative and enable our assessment of its success in addressing climate change. Besides, this approach helps establish causality, the development of policies, and enhances understanding of the complexities and problems that underlie the process of a policy actualization. Moreover, process tracing will improve tracking of progress made by the key players in the actualization of the policy.

Context

Climate changes over time as people carry on with their daily activities. In 1896, Svante Arrhenius observed that if the atmosphere were kept cold, fewer carbon gases would adhere to it hence paving the way for more cooling and allow the planet to reflect more sunlight (Muuls, et al, 2016, p. 21). James Croll also hypothesized that the colder the atmosphere, the higher the ice and snow level, hence the more the cooling effect on the earth. Climate change has been a global concern over decades with the United Nations and EU taking the initiative to spearhead the fight against aggravated global warming. Oberthur & Groen (2018, p.712) saw the Kyoto Protocol and the United Nations Framework Convention on Climate Change (UNFCCC) as the first step towards the actualization of emission reductions around the globe. According to Muuls, et al (2016, p. 21), there are set emission targets for developed countries, which the EU member states have ratified.

The discussion of Carbon gases has filled the House of Commons and House of Lords in the United Kingdom since 200 years ago, as expressed in the data extracted recently by the EU Council. Climate change has been debated in the British parliament for a very long time, with leaders affiliated to the Labor party mentioning the term with more intensity and concern than any other politicians do in the parliament. The current debates on the Paris agreements both in the UK and in the United States exhibit a shift in the views regarding climate change over several decades. The terms "greenhouse effect" and "global warming" that made the headlines of political debates in the UK, the United States and other United Nations and EU member states in the 1980s are back now as "Climate crisis" and "climate change." These phrases surface in the everyday debate regarding future life on planet earth.

In 2015, the EU and UN member states held the Paris Climate Change Conference (COP 21), in which over 150 delegates from all over the world agreed to take on challenges of global warming. This agreement was signed by 195 nations in December 2016, in which they agreed to lower global warming to 2oc and further the reduction to 1.5o C in the later years. In February 2018, the European Council concluded that the EU is determined to continue leading the way in advocating for climate change (Urpelainen & Van de Graaf, 2018, p.848).

Politicians have realized how the global climate puts pressure on not only leaders but also the civilians, and they have made it the central propositions of their political campaigns. However, different leaders view it differently, and they stress the issue differently. Jeremy Corbyn, the present presidential candidate for the UK, Boris Johnson (Conservative prime minister), Jo Swinson (Liberal Democrat leader), and Carolyne Lucas have all been very vocal about climate change (Vigar, et al, 2011, p.476). According to a report released in 2019 regarding the state of nature in Britain, 15% of British natural species face the danger of extinction, with the situation getting worse with every passing decade. Carolyne Lucas, who is seeking another term as Green leader MP pleads with leaders to harness all their energy and direct it towards the protection of nature. She explains that as the only way of standing a chance of addressing the dangers posed by hazardous climatic conditions.

Policy Analysis

The EU Emissions Trading System (EU ETS) was set up in 2005, aimed at reducing greenhouse gases produced in large industries. It is the world's most massive emissions trading scheme, accounting for over 75% of international carbon trade (Hulme, 2016, p.222). EU ETS aims to enable member states to achieve their strategies of limiting emissions of greenhouse gases from factories, moving installations and vehicles, and so on. It does this by setting up a system through which companies and industries that emit the involved gases can buy and sell the emission allowances hence enabling emission cuts at the minimum costs possible.

It operates within the principle of the 'cap and trade' principle, in which they set a maximum amount of greenhouse gases and require that the participating installations must not exceed this maximum capacity. Firms have to track and report their level of carbon dioxide release and must not exceed the allowances set ( Vigar, et al, 2011, p.475). Firms emit lower levels of gases and hand in allowances to the authorities, which in turn trade these allowances with firms that may want to release more. The system fines firms that fail to hand in allowances. The cap is lowered with time to propagate the reduction of total emissions. The trading of the allowances enhances flexibility since they can c costs can be cut at points where firms deem the emissions to cost low (Urpelainen & Van de Graaf, 2018, p.847).

In addition to EU member nations, Norway, Iceland, and Liechtenstein are committed to the EU ETS initiative. The system limits the emission of greenhouse gases by over 11,000 installations that use high-energy (Hulme, 2016, p.222). The System covers over 45% of greenhouse gases emitted by the above member states. Each member state has contributed to the realization of the EU ETS objective. The UK, for instance, has committed to cut its emissions of greenhouse gases to almost zero by 2050. The prime minister, Theresa May, appealed to his fellow leaders to focus on leaving the world better than they inherited it.

Germany has also targeted to reduce greenhouse gas emissions by 40% by 2020, 55% by 2030, and by 95% by 2050. The EU member legislated their first-ever law on climate change, the Climate Action Law in November 2019 as a move to achieve the 2030 climate change targets (Dessler & Parson, 2019). The Netherlands released court orders to industries to reduce carbon dioxide emissions by 25% in 2020. The country has also set aside over 100 million euros as grants to aid the usage of solar panels among the residents (Skjaerseth, 2016, p.518). In February 2019, France introduced a bill for Carbon-neutral Law, which targets to reduce the country's nuclear activities to reduce the greenhouse gas emissions from their industries. The French senate approved the bill in July 2019, raising the hopes that France will join the UK, Netherlands, among other EU member nations to curbing global warming.

The European Council, European Commission, and the European parliament have been phenomenal in propelling the EU ETS initiative. The European Commission has perpetrated the legislation and implementation of all EU policies on climate change and treaties regarding the same. It has been a remarkable participant in the execution of the EU ETS initiative and has paved the way for the EU Council and the Parliament (Vigar, et al, 2011, p.473). The Council plays a vital role in ensuring that the policy framework for the EU climate and energy policies are implemented. Through the 2030 climate and energy framework, the Council has set out a strategy to ensure that the EU's energy and climate systems will have more sustainability, competitive advantage, and security. To hasten the realization of EU ETS's objective, the European Council and parliament have created a market stability reserve for EU ETS following the decline in demand of the cap allowances. The reserve will be in action from January 2019 (Skjaerseth, 2016, p.515). The reserve will help reduce the imbalances between the demand and supply of the emission allowances. In the process, the "cap and trade" approach will be sustainable and effective thus boost the volume of greenhouse gases reduced per industry and spearhead the objective of fighting against the climate crisis.

The EU has been very active in the pursuit of climate change, featuring in the development of UNFCCC, the Kyoto Protocol, and the Paris Agreements. The Kyoto Protocol was adopted in Tokyo, Japan, in 1997 as a treaty to engage in the fight against hazardous global warming. It paved the way for the Climate Change Programme (ECCP) launched by the EU Commission in 2000. Kyoto Protocol was the first initiative of global climate change, after the ratification of UNFCCC in March 1944 (Shishlov, et al, 2016, p.779). The UNFCCC targeted to stabilize greenhouse gas levels and is ratified by 50 states. These two structures have been actively advocating for the reduction of greenhouse gases. They have brought together different member states with common objectives hence laying a foundation for agreements such as the Paris Agreement.

The innovation fund is a funding program aimed at promoting campaigns on climate change. The fund links strongly to the EU ETS since it funds technological innovations dealing with the use of low carbon levels. Since EU ETS targets to reduce greenhouse emission, the fund is appropriate for this policy. The Paris agreement realized that climatic change is a challenge that needs international cooperation agreement (Hulme, 2016, p.222). Therefore, bringing countries together to find a solution, and help combat climate change, enhances the actualization of the EU ETS since greenhouse gases are part of the climate change problem.

While the EU ETS has several advantages, it is not without challenges. First, the policy depends on the willingness of states, and some of the nations may not share in the objectives of other member states. The system may, therefore, be fragile and hard to operationalize. Besides, countries such as the United States have withdrawn from the Paris Agreement, an indication that the policy may not be easy to implement fully (Urpelainen & Van de Graaf, 2018, p.843). Secondly, the ETS has failed to reduce emissions by a substantial, and it has faced difficulties in achieving the desired rate of emission reduction since the last decade. On July 5, 2019, the EU Commission proposed a revision of the EU EST come 2020, a sign that the policy may need changes...