Implementing the EU Climate Law via the ‘Fit for 55’ package

ABSTRACT To implement the European Union (EU) Climate Law’s newly established 55% greenhouse gas reduction objective for 2030, the EU Commission suggests a wave of reforms to the European energy and climate legislation. The contribution aims to describe the EU Commission’s 16 initial legislative and strategic proposals regarding the major pillars of the European energy and climate legislation and intends to give an overview on the suggested reforms. By comparing the legal status quo with the legal framework de lege ferenda as presented by the Commission’s proposals, the planned major changes to the legal structures are identified. To achieve the 55% greenhouse gas reduction objective for 2030, all existing legal climate and energy acts are planned to be tightened by amending their targets as well as scopes and revising their structures. The suggested reforms concern the existing EU emissions trading system, effort sharing system between the Member States, energy taxation, energy efficiency and renewable energies. Additionally, the implementation of new instruments, such as the second EU emissions trading system for the sectors buildings and transport, the Carbon Border Adjustment Mechanism and the Social Climate Fund, is proposed. The design of the package shows that the Commission still generally pursues a climate legislation characterized by a mix of instruments and policies being both price based and regulatory. So, even though the major proposed change—the introduction of a second separate emissions trading system—would strengthen the role of carbon pricing, the Commission still relies on a mix of instruments without defining a leading instrument.

MODEL OF THE MUTUAL INFLUENCE OF ENVIRONMENTAL ASPECTS AND ENERGY RATIONING ON TRAIN TRACTION IN RAILWAY LOGISTICS

The article deals with the issues of environmental taxation of carbon dioxide emissions by the countries of the European Union and the methodology for calculating the amount of emissions by regulatory documents of Ukraine. It is established that our country's methodology is not adapted to real operating conditions under the influence of cross-border carbon taxation and the "Emissions Trading System". A mathematical model of the impact of power generating stations of states and their contribution to the overall energy balance of the country on the environmental cost and mass emissions of 1 kWh of electricity generation is proposed. The amount of electricity losses during its transportation from the power plant to the electric moving warehouse is determined and is taken into account in the total amount of deductions for the "Emissions Trading System" for DC and AC railway networks. Schemes of transit and local cargo routes are considered on the basis of a real fleet of traction rolling stock of Railways and a network of logistics lines. The passport characteristics of locomotives are analyzed and the amount of emissions and deductions during operation at Rated mode and idle speed is determined. Specific norms for selected routes and train conditions are calculated. The total costs, their cost and the amount of emissions and taxation of selected routes are determined, and rational economic and environmental logistics lines of train traffic are determined on their basis.

The International Influence of the Emissions Trading System in Mexico

This article aims to give an overview of the international influence of the Emissions Trading System (ETS) in Mexico. It is divided into three parts. First, it briefly examines both the international Climate Change regime through the description of such instruments as the 1997 Kyoto Protocol and the 2015 Paris Agreement, and the national regime by reviewing as the 2012 General Law on Climate Change (LGCC), the National Emissions Registry (RENE) and its Regulations, as well as other instruments regarding mitigation from carbon tax and clean energy. Second, it analyzes the legal framework of the pilot phase of the ETS in Mexico (under the cap and trade principle) which seeks to reduce carbon dioxide emissions (CO2) only in the energy and industry sectors whose emissions are greater than 100 thousand direct tonnes of CO2. In doing so, it also explains the relevance of implementing an ETS as a cost-effective mitigation measure to achieve the Nationally Determined Contributions (NDCs) in order to reduce 22% greenhouse gas (GHG) emissions by 2030 (increasing to 36% if there is international support and financing) and 50% by 2050 as a developing country. Third, it focuses on the European Union Emissions Trading System (EU ETS) experience and shows that all its phases must be done gradually by adopting the learning-by-doing approach.

Non-additionality, Overestimation of Supply, and Double Counting in Offset Programs: Insight for the Mexican Carbon Market

Mexico utilizes an emissions trading system as one of its carbon pricing instruments. Mexico’s planning, like that of other countries, includes flexible mechanisms such as offsets. Offsets allow market participants to compensate for their emissions through mitigation projects. Offsetting via participation in the Clean Development Mechanism and Joint Implementation was fundamental to the Kyoto Protocol. In contrast, the Paris Agreement is ambiguous about its use. Other national or regional offset programs, such as the EU, Australia, New Zealand, Japan, or Korea, work within emission trading systems. Subnationally, the California-Quebec program has been in effect since 2014. As Greenhouse Gases (GHGs) are global, offsetting allows market participants to compensate for their emissions through mitigation projects, whether domestically or abroad. Given their global scope, such programs present a wide variability in quality. This chapter presents an overview of offset programs worldwide and argues that non-additionality, overestimated supply, and double counting are their three most pressing quality problems. This analysis sheds light upon the nascent Mexican system and its offset program.

Emission Trading System and Forest: Learning from the Experience of New Zealand

In the area of international policy to mitigate climate change, the forest has been important in achieving the objectives of liable countries. The Emissions Trading System in New Zealand (NZ ETS) is the only case of an ETS integrating forestry as a mandatory actor. This is the result of prolonged political discussions and the characteristics of New Zealand forestry. Forest landowners are liable to surrender allowances for deforestation and can potentially receive allowances for the level of carbon sequestered. This scheme created new opportunities for forestry activities and impacted the decision-making trade-offs related to land-use changes. In Mexico, the implementation of an Emissions Trading System in 2020 is evidence of the country’s commitment to controlling domestic emissions under the Paris Agreement. Nevertheless, for now, the forestry sector is not involved as a liable actor. It is possible to envision the integration of the forest sector because of the extensive forest cover in the country, which provides a livelihood for a large part of the population. Mexico has the experience and institutional framework to integrate forestry into national emission accounting and carbon forest projects in the voluntary market. The potential impacts of this integration are both positive and negative. Environmental impacts are positive because forest areas can help mitigate emissions, but intensive carbon farming disrupts native forests and biodiversity. The economic impacts would be highly favorable for forest landowners if market volatility were controlled, but there is a potential loss of public revenue for the State. Finally, carbon forestry has the potential to cause conflict between economic sectors involved in land use and among participating communities.

The Environmental Justice Dimension of the Mexican Emissions Trading System

Emissions trading systems have the potential of increasing air quality given that GHG emissions are often co-produced with local pollutants such as NOx, SOx, and Particulate Matter (PM). Can emissions trading systems exacerbate or alleviate environmental justice concerns in emerging economies? According to the U.S. Environmental Protection Agency, Environmental Justice is achieved when no group is disproportionately affected by an environmental policy or phenomenon. The main objective of this chapter is to estimate the pollution burden faced by marginalized neighbourhoods in Mexico. This is relevant for Mexico given the beginning of the pilot program of the Mexican Emissions Trading System (ETS) and the country’s history of income inequality and poverty. Using linear regression and two-way fixed effects methods, we found that the highest emitters regulated under the ETS are located near poor populations. We estimated a 5$$\%$$ % CO2 emissions-reduction scenario corresponding to national targets and associated NO2 emissions to that scenario. We find that this scenario is consistent with a decrease in the exposure of NO2 pollution for the most marginalized neighbourhoods. This chapter also discusses other potential sources of environmental injustice that could result after the beginning of the ETS and the potential to address them.

Particularities of the Legal Framework for the Mexican Emissions Trading System

This paper examines the legal bases for the mandatory regulation of the emissions trading system in Mexico. They are derived from the main international instruments on climate change: the United Nations Framework Convention on Climate Change (UNFCCC) and its ambitious objective, the quantifiable commitment of the Kyoto Protocol, and its tie to economic instruments. The Paris Agreement, the Nationally Determined Contributions (NDCs) and the market mechanisms regulated in Article 6, the implementation of which is essential to achieve the Agreement’s objectives are also part of this broad system. Legally, the international foundations of the emissions trading system are reflected at the national level. For these, the constitutional and legal bases underpin the current regulation of the mandatory market instrument. It aims to effectively reduce, in terms of costs, the greenhouse gas emissions from the most polluting economic activities, without replacing direct control measures. The core aspects of this system are highlighted from a national regulatory analysis, with special emphasis on the importance of a limited cap and its future reduction, as well as the legal nature of allowances that are allocated by the public administration to the regulated industries’ facilities.