Carmen Bunzl - Universidad Pontificia Comillas

Chapter 4. Case Study: Spain 191
negotiations. The recently proposed EU effort sharing is based on a cost-
effective reduction approach (similar to case (i)).
Subsequently, the EU-wide cap for the ETS as a whole is allocated straight to
the eligible installations throughout the system, based on EU-wide allocation
rules. In contrast, the EU-wide target for the non-ETS sector is first shared
among the Member States, which can be based on a variety of burden-sharing
approaches; here, the approaches selected are Marginal abatement costs,
Grandfathering, Triptych and Per capita convergence. The Commission proposes
using GDP/capita as the main criteria when setting the targets for Member
States.
Sijm et al. (2007) discussed the pros and cons of both options. Centralizing or
harmonizing the process of setting the ETS cap and the allocation rules for
eligible installations throughout the EU, as in option 2, may appear an attractive
option as it reduces competitive distortions and other adverse effects due to a
national-oriented allocation process, but it implies a significant transfer of
decision competence from the national to the EU level (compared to the present
allocation process).
3.2.1 European Commission’s proposal for EU effort sharing (January 2008)
On 23 rd January 2008 the European Commission included a proposal on how
efforts could be shared among Member States (MS) to achieve the targets
endorsed both by the European Parliament 1 and by EU leaders at the March
2007 European Council (see Section 3.1).
The EU ETS is an EU-wide policy instrument used to reduce GHG emissions
in electricity plants and major industrial installations in a cost-effective manner,
currently covering some 40% of all EU-27 GHG emissions. In the past, National
Allocation Plans (NAPs) were used to define the total amounts of allowances to
be distributed to these companies.
1 European Parliament resolution on climate change adopted on 14 February 2007 (P6_TA(2007)0038).
Escuela Técnica Superior de Ingeniería ICAI Carmen Bunzl Boulet Junio 2008