The UK’s leading business organisation has called for Europe to adopt a 2030 carbon target as a matter of urgency.
The CBI said there should be political agreement on a new European energy and climate change package by 2014 for the “future” of the EU Emissions Trading System (EU ETS).
Under the EU ETS, businesses are expected to pay for their greenhouse gas emissions in an effort to reduce pollution.
The CBI warned that short-term “tinkering” with carbon auctions would not stimulate investment and argued a successful carbon market is essential if Europe is to create sustainable and secure growth. It suggested the real reason the EU ETS is not delivering is because of the short-term focus, which it claims has “exaggerated the impact of the recession on the system”, leading to uncertainty among investors.
Rhian Kelly (pictured), CBI Director for Business Environment Policy said: “Investors are ready for the low-carbon race but right now they can’t see the finishing line. Europe urgently needs a 2030 carbon target to give investors the confidence to get going.
“Emissions trading is key to unlocking business investment in low-carbon technology to help get the economy growing. But at the moment the carbon market is not delivering for Europe because of its short-term focus. Without a long-term plan, the short-term changes being debated now are just tinkering with the market and won’t do anything for investor confidence.”
She added the EU ETS reform must include “smarter support” for energy-intensive businesses in Europe.