WRITTEN QUESTION E-1488/02 by Riitta Myller (PSE) to the Commission. Emissions trading.
Date: 2002-05-29
Institutions: European Parliament, Provisional data
Subjects: consumer price, electrical energy, greenhouse gas, liberalisation of the market, reduction of gas emissions, tradeable emission permit

14.11.2002

EN

Official Journal of the European Communities

C 277 E/215

In conclusion, this is a project of limited scope which is not likely to have a significant impact on the site,
given that it was classified because of the richness of its marine ecosystems. Moreover, the management
plans and preventive and corrective measures adopted by the Spanish authorities should help to prevent
the deterioration of the natural habitats present on the site. For these reasons, having examined the
Spanish authorities’ reply, the Commission concluded that Community environmental law was not being
infringed in this particular case.

(2002/C 277 E/236)

WRITTEN QUESTION E-1488/02

by Riitta Myller (PSE) to the Commission

(29 May 2002)

Subject: Emissions trading

Some electricity trade experts have pointed out that the proposed emissions trading model would lead to a
substantial rise in consumer prices on the open electricity market. The Commission’s ‘Evaluation of
Alternative Initial Allocation Mechanisms in a European Union Greenhouse Gas Emissions Allowance
Trading Scheme, NERA 2002’ also states that the price of emission allowances will be passed on to prices
on the open electricity market (what is termed an opportunity cost).

Has the Commission calculated the effects of emissions trading on consumer prices on the open electricity
market? Of what order of magnitude are the costs arising to electricity consumers? In what relationship do
the resulting costs stand to the cost advantages brought about by the emissions trading system, as set out
earlier by the Commission?

Answer given by Mrs Wallström on behalf of the Commission

(12 July 2002)

The extent to which electricity prices may rise depends on the instruments chosen to address climate
change. It is the objective of the Commission that the Kyoto targets are implemented in a cost-effective
manner so as to ensure that costs for European consumers as a result of the Kyoto Protocol are minimised.

Emission trading is a flexible instrument that will ensure that emissions are reduced cost-effectively for all
participants.

Estimating the effects of implementing the Kyoto agreement on electricity prices in the period 2008 to
2012 is subject to a lot of uncertainty, as the price development in the absence of further climate policies
is also uncertain and will depend on progress in other Community policies like the liberalisation of
electricity and gas markets. However, increases in electricity prices have to be seen in the perspective of
the substantial lowering of electricity prices that many consumers have experienced as a result of the
partial electricity market liberalisation so far.

The Commission does not consider useful the comparison of expected electricity price increases with the
cost savings from using emission trading at Community level. Potential electricity price increases and the
cost savings achievable from Community-wide emission trading are highly sensitive to the assumption of
what alternative policies would have been chosen to cut greenhouse gas emissions in the electricity
generation sector in the absence of emission trading.

In the material accompanying the proposal for a Directive establishing a scheme for greenhouse gas
emission allowance trading the Commission has presented some estimates of likely cost savings from
emission trading for the electricity and heat generation sector of more than € 1 billion per annum.