Dóra Fazekas Carbon Market Implications for new EU - UniCredit ...

Concerns over the enlargement
Van Der Gaast stated in 2002, even before the accession of the EU12 to the EU that “Candidate
countries will most likely transfer GHG emission reduction credits to other industrialised countries
listed in Annex B of the Protocol. This can take place through JI project co-operation and/or
International Emissions Trading.” Fankhauser and Lavric (2003) expect EU12 to become the main
suppliers of emission reductions under JI and IET. CEE countries faced EU accession processes
involving substantial changes in their national legislation to comply with EU environmental and
energy standards. CEEs had to harmonize their national laws with the EU legislation in order to
become eligible to join the EU. Accession introduced more stringent emission and clean air limits,
technical standards, nuclear safety regulations, and liberalization of energy markets with the
opening up of power grids and electricity trading (Black et al, 2000). The requirements of the EU
legislation (Acquis Communautaire) were fully introduced into practice until 2004 – in this regard
there is no difference between old and new MSs.
Skjærseth and Wettestad (2007) present the widely held assumption that as the EU expands to
include the CEE countries its capacity to adopt and implement environmental policy will be
negatively affected. The CEE countries have been expected to be laggards, slowing down,
weakening or even reversing progress in environmental policy-making. Two years after the
enlargement, the new Member States have begun to make their mark on EU decision-making and
implementation. In their article Is EU enlargement bad for environmental policy? Confronting
gloomy expectations with evidence they conclude that enlargement does not result in any
breakdown of EU environmental policy, however impacts will vary for particular issue-areas. They
find that the accession weakened the implementation of the EU emission trading directive and have
affected EU air policy hardly at all. The importance of good institutions is emphasized both in the
context of transition from central planning to a market economy, and in the creation of
environmental markets.
The EBRD (1999) considers the central lesson of transition that markets not function well without
supporting institutions. A strong institutional framework is needed for ensuring the efficiency and
integrity of the emerging carbon market.
Barker et al (2001) argue that the required reduction from the baseline emissions will be less for the
enlarged EU than for the current EU15. The authors argue that while base-year emissions for an
enlarged EU are considerably higher than for the EU15, projected 2008–2012 emissions do not
show a similar increase. In the 12 new Member States, total greenhouse gas emissions (excluding
LULUCF) decreased by 0.3% between 2004 and 2005 and by 27.8% between 1990 and 2005.
Except in Slovenia, 2005 emissions of all the new Member States that have a Kyoto target were
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