European Commission fails to make pollution pricing work for the climate

Published: 15th July 2015

15 July 2015 - The European Commission today published – as part of its “summer package” – a legislative proposal to reform the EU Emissions Trading Scheme (ETS). The Commission has failed to use this key opportunity to help address a key stumbling block in the climate negotiations: the provision of predictable and additional climate finance.  

In response, Lies Craeynest, Oxfam’s EU policy advisor, said:  
“The European Commission has wasted an opportunity to make its flagship climate tool fit for purpose by offering compensation to heavy polluters instead of making pollution pricing work for low carbon development and climate change adaptation in poor countries. 

“By failing to make the sale of pollution permits pay for clean development and climate adaptation abroad, the European Commission has lost an opportunity to restore its international climate leadership, and leaves the people most impacted by climate change without additional support. 

“It’s time for EU leaders to step in and realize the need to overcome roadblocks to an agreement in Paris. Making pollution pricing pay for climate action should be a no-brainer for EU leaders to signal how they will stop using existing aid and instead deliver additional support to fund climate action in vulnerable countries.” 

Notes to editors

The legislative proposal from the European Commission for a revised EU Emission Trading Scheme (ETS) comes after EU leaders reached an agreement on 23 October 2014 on the EU 2030 Climate and Energy package and on the EU ambition to reduce carbon emissions by at least 40% in 2030.

Oxfam International released in June a briefing note “The ETS International Climate Reserve – the EU ETS as a source of international climate finance” that presents a proposal by Oxfam and others to deliver increased financial support for climate action by poor and vulnerable countries by holding up to 10% of emissions permits in an EU Climate Reserve and allocate the auctioning revenues to the Green Climate Fund. This could boost the EU’s climate finance contributions ahead of the climate negotiations at COP 21 in Paris this December, where climate finance will play a key role in bringing about a successful outcome.

The chance of a successful Paris climate deal depends on rich countries showing they have kept their past commitments, especially the promise they made in Copenhagen to jointly mobilize $100bn of climate financing per year by 2020. Oxfam estimates that currently less than $20bn per year in public finance is flowing to developing countries dedicated for climate action, leaning a huge climate finance gap still to bridge by 2020. The EU’s fair share is estimated by the EC to be about a third of the commitment.

Contact information

Gaëlle Bausson on +32 (0)473 56 22 60 or

Twitter: @gbausson

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