By Martin Banks - 20th May 2010
The spectre of carbon leakage cannot be allowed to have such a determining effect on EU climate policy
Yannick Jadot
A new report says the "threat" of carbon leakage has been "seriously exaggerated" by EU industry in an attempt to avoid regulatory measures on climate change.
The report, published on Thursday by the Greens/EFA group in parliament, claims to assess the "true extent" of carbon leakage, arguing that there is a "lack of evidence" to back up fears that tough emissions limits in the EU would cause industry to move elsewhere.
Its publication comes ahead of next week's communication from the European commission on increasing the EU emissions reduction target and the impact of carbon leakage.
At the launch in Strasbourg, French Green MEP Yannick Jadot, said, "The spectre of carbon leakage cannot be allowed to have such a determining effect on EU climate policy and legislation given the lack of evidence for leakage beyond a handful of sectors.
"In particular it cannot be continually trotted out as an excuse for failing to deliver the promised step-up in the EU emissions target to a 30 per cent reduction.
"On the contrary, such a move to a 30 per cent reduction would be a huge opportunity for the EU economy and job creation.
"The study also makes clear that the free allocation of permits under the emissions trading scheme is an ineffective way of addressing the problem for most of the few sectors actually at risk of leakage."
She added, "Given the major problems associated with the free allocation of emissions permits and the fact its role in addressing leakage is limited, policymakers must act to move to the full auctioning of emissions permits as soon as possible.
"Clearly, other measures to address leakage (such as border tariffs) should only be considered in place of - and not additional to - free allocation.
"It is also important that the forthcoming European commission decision on benchmarking for the allocation of permits is rigorous and new legislative loopholes are not created due to spurious carbon leakage arguments."
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