One of the possible financial incentives to foster low-carbon economies is pricing carbon and regulating its quantity through a carbon emissions trading system (ETS). In the European Union, the current system launched in 2005 has generated revenues, but much less than expected for several reasons: the carbon price is hovering around a very low €5/t, and too many permits to pollute have been given away to high-carbon industries.
In most European countries, local authorities and their citizens have not seen a cent from the ETS revenues. Instead, many carbon intensive industries have benefited from the over-subsiding of carbon pollution through the ETS. This is the case in Germany, where industries made a €4.5 billion profit between 2008 and 2014, according to a recent study by the environmental consultancy CE Delft and the Oeko-Institut.
Carbon impacts are strongly felt in urban areas, as air quality decreases and the environment suffers – not to mention the long-term consequences of climate change. It is an absolute necessity that revenues from ETS or carbon taxes benefit the local level, in order to absorb the social impact of carbon and boost the local energy transition.
The idea is somewhat new, but there are already flagship examples of how carbon credits can be invested locally. They are easily replicable and have already provided tangible benefits to cities.
|In Bucharest, CO2 emissions serve for… CO2 reduction measures!|
The Romanian government spends around 70% of the income it receives from the EU ETS on climate action projects. Between 2013 and 2014, this accounted for €260 million. In the next four years, Romania expects to collect up to a further €2 billion from the system to lay the path towards a low-carbon and resilient economy.
Some of the carbon credits have helped Bucharest, the Romanian capital, pay for new bike lanes and metro improvements. Now, the city is home to 122 km of cycle paths and four metro lines with 45 stations. This number is bound to increase, as Bucharest wants to encourage its citizens to shift to clean transportation modes. Currently, only 1% of people in Bucharest use bikes and about 16% use the metro.
More examples and details on our 3D vision in the last Energy Cities INFO
November 21, 2016