Facts on ETS performance 2008-2011 (phase 2) as outlined in a communication on the ETS
- Daily trading volume rose to an average of 23 million EUAs in 2011
- Over the counter trading, i.e. EUA trading without the use of a regulated market place, has significantly decreased
- From 2008 to 2011, almost 8200 million EUAs were issued, almost 97% of those for free, the rest (283 million) auctioned
- Significant volumes from international credits (CERs from CDM projects and ERUs from JI projects) have entered the ETS (CDM projects allow for transfer of carbon emission reduction recognition from non-Annex B to Annex B countries while JI refers to the same mechanism between two Annex B countries). In total, 450 million CERs and 98 million ERUs, i.e. pollution rights for almost 550 million tonnes of CO2.
- With 1886 million tonnes of verified emissions, 2011 was approx. 10% below the 2008 value of 2100 million tonnes. This reduction was driven by the economic downturn in 2009, when verified emissions amounted to 1860 million tonnes.
- Comparing the 2008-2011 totals, 8720 emission allowances were issued thereof approx. 550 million tonnes from CDM and JI projects. In the same period, 7765 emissions were verified, using up pollution rights
- Thus, between 2008 and 2011 a surplus of almost 1000 million tonnes of emission allowances was created, thereof more than half by international projects
- It is therefore not surprising that the prices of emission allowances is currently the lowest since phase 2 has started
- It comes even worse: the surplus of emission allowances is expected to rise above 2000 million tonnes by 2013. This is due e.g. to large amounts of international credits entering the market until April 2013 and due to the auctioning of 300 million allowances for the support of Carbon Capture and Storage
- This surplus will not be completely reduced until long into the 2020s according to the EU Commission
Criticism by TheCompensators*
- The excessive use of international credits has blown up the surplus of emission allowances to levels that contradict the very purpose of the ETS. Therefore, TheCompensators* emphasize that compensation through the deletion of ETS emission allowances is much more effective to reduce European CO2 emissions than donating for CDM projects. You can donate now here.
- The 2009 economic downturn and the success of renewable energies have reduced emission compared to 2008 levels. Since no measures are in place to adapt the cap of emission issued, this also leads to oversupply. Policies need to be adopted to prevent this effect.
- After all, emissions stay in the atmosphere for approx. 1000 years, which is basically forever from a human perspective. Thus, every bit that we can reduce emission faster limits cumulative greenhouse gases in the atmosphere. From a climate point of view, it makes no sense to keep stocks of emission allowances to delay the transition to a low carbon economy