Opinion by Mathew Carr
Oct. 22-23, 2021 — LONDON: If it’s true that the European Securities & Markets Authority is going to report on potential problems with Europe’s carbon market by Nov. 15, then that’s a few days late for United Nations climate envoys at the Glasgow summit who are meant to wrap up by Nov. 12.
EU nations, seeking to deal with a spike in natural gas, power and carbon costs, late yesterday said:
- the European Commission should “study the functioning of the gas and electricity markets, as well as the EU Emissions Trading Sysytem market, with the help of the European Securities and Markets Authority (ESMA). Subsequently, the Commission will assess whether certain trading behaviours require further regulatory action”
- UN envoys need to know at least a preliminary outcome of this investigation by Nov. 10, as they meant to complete the Paris climate rulebook by the end of that week. After all, the EU market is world’s biggest cap-and-trade system in the world by volume and the Paris rule book is likely to cover carbon markets, the most cost-efficient climate solution according to economists.
- Envoys need to know if markets are not behaving in a pure-enough fashion, before promoting them in the Paris rule book.
- Still, UN climate talks usually run over time, so perhaps Nov. 15 might work, afterall.
- I’ve asked the commission and ESMA to comment.
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