🔎 What’s going on?
The UK government confirms that a domestic Emissions Trading System (ETS) will be established when the UK leaves the EU and the EU-ETS at the end of 2020.
📉 What does this mean?
Let’s first start with what “Emissions Trading System (ETS)” is. It’s a market-based system where the government is trying to limit pollution (in this case, carbon emissions) by giving out permits to businesses. These permits limit (or “cap”) the amount of carbon emissions a business can emit each year.
The new UK-ETS has been designed with the Scottish, Welsh and Northern Ireland governments. The ultimate goal of the ETS is to reduce carbon emissions. Therefore, the UK government wants to not just replicate the EU-ETS, but also be more ambitious by aligning the permits to the UK’s net-zero climate law. This makes perfect sense. The system applies to over 1000 UK factories, plants, businesses and airlines who are still covered by the EU-ETS.
❓Why should I care?
The main goal of an ETS is to limit and reduce carbon emissions - although not perfect, the EU-ETS has so far been successful in putting a cap on industry emissions. Replicating it for the UK should (hopefully) yield similar results for UK emissions.
🚦 Where do we need to be?
For the UK-ETS to be successful, we need a good carbon price - that is absolutely crucial. Before Coronavirus, the carbon price for the EU-ETS was EUR 25 per tonne. Due to the slowdown, the price has now dropped to EUR 15 per tonne. The price is linked to the amount of revenue the system generates, so of course, a lower price means less revenue for EU member states. Over 80% of the revenue generated is spent on climate action - such as renewable energy, energy efficiency and climate change mitigation and adaptation measures.
👤 What can I do about it?
As an individual or business, put an internal price on carbon. This simply means that you start measuring your personal or business carbon footprint. The mere act of measuring your footprint allows you to set an internal price on carbon - it means you know what your activities are costing the planet.
Once you’ve measured and put a price on carbon - then work to reduce it, offset it or remove it.