New European Union figures suggest greenhouse gas emissions policed by the EU’s carbon trading platform dropped by nearly five per cent last year despite a 1.3 per cent growth in GDP.
Preliminary figures from the European Commission appeared to show that the EU has already met its 20 per cent carbon reduction target six years early, partly as a result of warmer weather and upgrades to manufacturing plants.
Analysis of the data by Bloomberg newsagency showed that pollution from the 12,000 installations in the Emissions Trading Scheme (ETS) fell by 4.9 per cent last year to 1816 million tonnes, matching the EU’s 2020 target.
The British environmental news website BusinessGreen reports the NGO Sandbag estimated that emissions fell below the 2020 target to 1814 million tonnes.
However, Thompson Reuters Point Carbon calculated a 4.5 per cent fall to 1822 million tonnes.
Calculations varied because many businesses have yet to submit their data for 2014, so analysts used assumptions to fill in the gaps.
However, analysts were in agreement that the ETS saw a record fall in emissions last year.
It was also the first year since 2008 that annual emissions were higher than the annual supply of allowances, in part because of a temporary fix launched last year that saw 900 million allowances “backloaded”.
The power sector saw a significant drop of seven to eight per cent in 2014, driven by unusually warm weather.
Scientists estimate that climate change is very likely to have helped make 2014 Europe’s warmest year since the 1500s.
Yan Qin, senior carbon analyst at Thomson Reuters, said the mild winter was a major factor in the fall in power demand.
“Emissions intensity dipped further as renewable energy plays a larger role in the power mix,” she added.
In addition, gas-fired power generation finally reversed its downward trend and became more competitive against coal in some countries, due to plunging crude oil prices and national policies such as United Kingdom Carbon Price Floor.”
The figures also revealed that emissions from the industrial sector fell by 0.4 per cent last year, despite a 0.8 per cent increase in production.
The EU is currently debating plans to head off risks the price of carbon will collapse by the end of the decade by removing hundreds of millions of emissions allowances from the ETS.
The EC has proposed to start the so-called Market Stability Reserve (MSV) in 2021, but politicians on the European Environment Committee say the MSR should begin by the end of 2018.
A number of member states, including the UK and Germany, have called for the MSR to be introduced as early as 2017 and demanded all the backloaded allowances be permanently removed from the market, arguing that failure to fast track the reforms will undermine the carbon price and hamper green investment.
BusinessGreen reports Damien Morris, Sandbag head of policy, said the latest figures showed that carbon price risks crashing to unsustainable levels without ambitious reforms to the carbon market.
“Even as the EU economy recovers greenhouse gases are falling fast,” he said.
“Policy makers can therefore safely adopt more ambitious climate policies without fear of triggering high carbon prices.
“In the months ahead lawmakers must reach an agreement to reform the EU’s flagship climate policy, the ETS, or see it slide into ever increasing irrelevance.”
