The group, led by Professor Michael Grubb from Cambridge University and Dr Ottmar Edenhofer from the Potsdam Institute for Climate Impact Research, submitted a statement to Environment Commissioner Stavros Dimas calling for the EU-ETS to be strengthened.
Speaking at a joint press briefing with Commissioner Dimas and environmental group WWF on 9 November, Grubb said the second phase of the ETS, which runs from 2008-2012, will be a "credibility test" in the EU's pledge to reduce emissions of global warming gases.
But Grubb said that planned allocations for 2008-12 were currently inadequate: "Our estimate is that for the EU-ETS…to be consistent with EU obligations under the Kyoto Protocol, the current allocations need to be cut back by about 10%."
Grubb criticised the German plan for "subsidising in effect the construction of new coal-fired power plants" by granting them free carbon-pollution credits. "That is simply inconsistent with everything that we know about climate change and indeed with what the German government says about the need for steeper reductions," Grubb said.
In contrast, he praised the Spanish and Italian plans for being "serious" and "consistent" with Kyoto obligations.
In line with the conclusions of the UK Stern Report, the 50 economists say that the costs of tackling climate change are "much lower than the ones caused by climate change impacts, such as floods, droughts or new infrastructures". They argue for:
- Tightening CO2 emission limits under the second phase of the ETS (2008-2012) in order to create scarcity on EU carbon markets and push CO2 prices up;
- auctioning excess allocations in order to push carbon prices upwards, and;
- harmonising the scheme "in order to reduce competitive distortions created by…each member state granting emission allowances in different ways".
