The EU's emission trading scheme as a source of international climate finance

The revision of the EU’s Emission Trading Scheme (ETS) offers a unique opportunity to increase transparency and predictability of climate finance from the EU and its Member States by establishing a mechanism that automatically directs a portion of the ETS revenues as additional international climate finance.

The EU needs a successful international climate deal to help move forward with its own climate and energy ambitions and decarbonization strategy. To get a successful climate deal, the EU needs to stand with the most vulnerable countries and prioritize its alliance with them. For these countries, climate finance - particularly for adaptation – is crucial, and they need guarantees that there are clear provisions to ensure that post 2020, climate finance will still be available at increased levels. The ETS international climate finance fund is a way in which climate finance guarantees can be given, solidarity can be built and allies can be supported.