Energy and Climate Change Secretary Ed Davey has said he intends to reform the EU Emissions Trade System (ETS) four years earlier than planned.
Mr Davey has claimed the ETS ‘undermines the functioning of the market’and increases the cost of meeting carbon reduction targets.
He believes that Europe can ‘lead the fight against climate change’ by bringing the Market Stability Reserve (MSR) forward from 2021 to 2017, helping to erode the ETS’s oversupply and drive investment in low carbon technologies.
Mr Davey said: “A strong EU ETS can be a symbol to the rest of the world – but that is not what we have now.
“Europe has the opportunity to show the world how we can cut emissions while creating investment, jobs and growth – but only if we reform the system, and reform it fast.”
It is thought the MSR will address the current issues by creating a reserve that increases or reduces the supply of allowances.
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