 So, I'm going to give a talk about how the European Commission should go about improving the effectiveness of the EU emissions trading scheme. I put the word fixed in inverted commas, because it does beg the question, as I was putting, is it broke? In my view, no. Is there a broader problem that needs to be fixed? Yes. Is there a quick fix? Unfortunately not. ac edrych am yr unig i'r ystod i gweithio y Monedd wedi diweddol. Mae'r unig wedi eu chyglwtau ar y cyfrifol, felly mae'r holl yn gweld cysylltu'n gweithio'n rhysgwyr yn cyfeiffydd ingylliant o'r grwp hyn neuri yma o'r Eidex yn gyffredinol gweithglwyr. Mae hynny ni'n gallu cyfrifol yma ac mae'r cysylltu yn gyhoeddur hwnnw i gyrfa hijwr, ac mae y gallwn parwadol gweithio cyfrifol ystod yn cael ei gŷrwyr. ond y bydd yw'nllun i'r cyfnod o'r pwysig ymddangos o'r ystyried. Mae'r cyfnod i'r rŵn i'r cyffredin iawn yma, ond ymgylch yn ei ddysgu. Pwylltebwch am gwellio cymdeithasol i'r cymysgau cyfeirio yw'r cyfnod o'r cyfnod o'r pwysig o'r cyffredin iawn o'r cyffredin iawn o'r cyffredin iawn. Ond o'n gobeithio o'r cyffredin iawn o'r cyffredin iawn o'r cyffredin iawn. ac mae'r ffordd i'r ffordd fath o'r cyffredinol, oherwydd, y ffordd y gallwn y gwirionedd yn ei dweud, gallwn y rhai o'r ffordd i'r ffordd? Felly ydy'r ffordd o'r ffordd yn y negatif, ac yn fawr, yw'r ffordd, yw'r ffordd yn y ffordd ar gyfer eich meseg cyllid. Felly, yw'r ffordd ar y cwrtiau yma'r ysgrifennu, oedd yn ddweud yr ysgrifennu Dynes, rydyn nhw ddim yn oed yn oed i dychwyn ac mae'r SES yn y trobl. Mae'r cyd-dyn nhw'n meddwl yw'r prysau yw'r cyd-dyn nhw'n mynd i'w ddweud ac mae'r ffordd o'r ffwrdd o'r hyn. Mae'r byw'r cyd-dyn nhw'n mynd i'w ddweud yn Dde-Mark, gan y dyn nhw'n ddiolch i'r presidon sy'n ddiddordeb yn ei ddod, ac mae'r cyd-dyn nhw'n meddwl i'w ddweud ychydig i'w ddweud i'r cyd-dyn nhw'n meddwl i ddim yn ddod i'n ffordd i'r ffordd o'r cyd-raddau. Dyna'r cwmdeithas yw'r propozol gynhyrch, ac mae'r cwmdeithas ar gyfer y cwmdeithas sydd ei chyfyddiadau a'r ffordd i'r cyd-raddau. Ac mae'r cyd-raddau, mae'r cymdeithas ond mae'r propozol i'r cyd-raddau. Felly, mae'i eisiau ei wneud yn ffawr o'r cyd-raddau, mae'n cyd-raddau. Mae'n ddif chi'n mynd i'n meddwl o'r gynhyrch a ddiwrnodd yn ymddangos i'r ysgol iawn, ac rydyn ni'n ffordd o'r ddweud. Felly, y cyfnodd yn dda, ydych yn ymddangos i'r ddweud yma, yn y rhan o'r ddechrau cyfnodd. Ond, oherwydd, Ibech a'r unrhyw o'r ddechrau wedi ddweud o'r ddechrau'r ysgol iawn, a'r ddweud o'r ddweud o'r ddweud, a'r ddweud o'r ddweud o'r ddweud, a'r ddweud o'r ddweud o'r ddweud o'r ddweud, Bl den o'r dsgol iawn yn ymddangos i'r ddweud, ond, yn y Cyfnodd Polisiig Pol kuitadau, yn ymwrdd y路, yn am Buffol sydd ar beth yn ei gymryd, un o coumiol – r대�wysfodol autorfa, mae'r ddem الف angen o'r directoedau, ond mae'r denig iawn sydd yrZYnt ysgol iawn, crtaid eu drof bi springsawr yn ychydig fairer ac yn rhynweithdd. Ond, cyfnodd o'r ddweud o'r ddweud? Rwyf ddoch yn festiad pell oes Yong yng Nghymes Tynchwyr ar y cyfnod nesaf rydych chi gyda'r cyfnod ar y cyfnod yma, ac yw'n mynd i'r holl eich holl yn rydyn o'r llwy ffordd yma. A'r wneud o'r ddweud ychwaneddau yma o'r ddweud ar yr Cymru, oherwydd ymgyrcheg o'r ddweud yma, oherwydd mae'n ddweud o'r llwy ffordd yma o'r cyfnod yr unrhyw gwybeth. Felly, o'r cyfnod, 6-8 mlyneddau, ac mae'n rwy'n gofyn i'r propozol thatoedd yna, a dynoddol o waith i'r ddull ffaith o'r bwrddau, ond yn cael ei meddwl am gyfynigol gyda'r ysgol, i fydden nhw'n mynd i'r ddweud y gallai gwybod, ac mae'r llei yw i'r ddull yn defnyddio'r effeithiol. Felly mae'r dda, dwi'n meddwl o'r ddweud, i dda, i fech, am ffwrdd â'r ddechrau i'r dda i fynd, mae'r ddweud o'r ddweud o'r ddweud, ac mae'r ddweud o'r ddweud sy'n ei ddweud o'r ddweud. Felly mae'r unig o'r gael o'r grannu gwahanol mewn gwahod. Mae'n gweithio'r gwahanol sy'n i'r cyfnodd. Yn hynny mae'n gweithio'r gwahanol yn ymddangos, mae'n gweithio'r instrumentau cyfnodd. Mae'n gweithio'r instrumentau cyfnodd, mae'n gweithio'r ddod yn ymddangos ymddangos. Yn ystod, mae'n gweithio'r efo'r cyfanol. heb y tariff ar gyfer o hy Squats fel yr uniged amwyaf ar gyfer swyddbeth. Mae angen o'i unrhyw deall angen. Na ddanctu'r rhai sy'n látyr cymryd yn cyfweld o gyfer gyda'r angen o germaniau sydd yn cyfryd gyda'r hynny o'r cyflwynt sydd yn unig storfyniad. Mae angen o'r adeiladio ar gyfer cymryd yn gydych chi, sydd argyrsio ar gyfrifwyd y winfarn. Mae angen o'r cyfrifwyd ddiddordebfydd o gyfrifwyd y sydd am hyn i'r cyfrifwyd sydd oed wych yn cyfrifwyd, ac mae'n dweud i chi'n gweithio'r byddwyr. Felly, mae'r cyfleu cyfnod o'r cyfnodau sydd o'r hynodd a'r llaw. Mae'r ddweud, ond mae'r ddweud yn ystafell, mae'r ddweud yn ystafell ar y ddweud, ac mae'r ddweud yn y ddweud o'r ddweud. Mae'r ddweud yn ystafell ar y dyfodol, oherwydd arweinio'r strategiau ac mae'r ddweud yn y ddweud, Michael Grubb published a paper that analysed to what extent is the current low price of eulances the result of the very deep recession, and his conclusion was actually the prices will be down on the floor anyway, that most of that effect is due to this being some abatement within the ETS because of the carbon price, but there's also been a huge amount of abatement through the renewables directive and through the energy efficiency directive that's impending and legislation to support energy efficiency, and I can provide a link to that paper if anybody is interested. The current proposal then would allow or would formalise what the commission believes is an already existing right to intervene whenever it sees fit to change the timing of options to keep the price within what it deems to be an acceptable range. So it could be that prices are deemed to be too low or perhaps if there was a boom and prices started to store and the economy was getting into trouble they could intervene to stop it getting too high. Our views on this are pretty much in line with those of business Europe, which I'll just put up here and just quickly read through it. So the key point is affiliated to business Europe, so it's just one of 20-yard national organisations. So business Europe would have similar but not identical views to Euroelectric. Whereas Euroelectric is concerned about the proposal but on balance would probably favour it, business Europe has concerns about it and on balance would not favour it. The key points are coherence of policy and avoiding short term tinkering that could actually significantly increase uncertainty. Uncertainty is the enemy of investor confidence. If I could just unpack that very slightly, so this is something that I was trying to get my own head round, what is the actual intended outcome and what is the likely outcome of the current proposal, which is merely to withhold allowances in the early years but you have to put them back in the later years because it's not a permanent removal. So whether you take out half a billion or a billion allowances if you believe that it is a temporary removal, as Frank has said, you get a spike in the early years and then you get a slump perhaps to zero in the later years. It's only going to be a sustained increase if you believe that there will be further legislation that will permanently remove those allowances or perhaps that there will be a very, very stringent tightening in a post-2020 period that would soak up all of the banked allowances and cause the price, which is probably being partly propped up by banking at the moment to be further banked. A third possibility is that people would see that it's going to be a temporary measure. They don't believe that that further legislation will come through because if they could have got it through the first time they would have, what makes you think it would be more successful this time around? And if then there were flexibility mechanisms, whether it linkages with other trading schemes such as in Australia or the use of whatever instruments, you could get around the short-term supply problem, borrowing the next year's allowances, that in fact the price might not even go up at all. So take your choice, which of the three outcomes depends not so much on the fundamentals, but perceptions. The perception becomes the reality. I couldn't actually call it as to which of those three is the most likely. I know the one that's intended and that's a sustained increase. So we would have concerns that you can't actually predict what the outcome is going to be even though you know what you'd like it to be. So what are we recommending instead? Well firstly it is a long-term problem. It's a structural problem and it's not going to be fixed overnight. You know somebody who's building a plant that has a 30-year life wants to know that the price is going to be stable and the investment's going to be attractive for the life, not just for next year. If we're going to be able to link with other trading schemes around the world, and you know the UN process currently is the only game in town, but increasingly we're moving towards if we can do a deal with a region such as China or Pacific, if we can link our trading scheme with other trading schemes that's going to help. But frankly who'd want to link into something if they felt that politicians who won't be able to resist the temptation to interfere, the term that was used within our climate change working group was this potentially is a tinkerers charter and it could have unfortunate unintended consequences. The next thing is that there is and has been a certain degree of policy competition between DG climate action and DG energy. So you have targets being set on energy efficiency, on renewables and on climate which supposedly were put together as a package, but experiences shown that's not actually how it's turned out. In fact there was a recent analysis that suggested if we got the 20% renewables and the 20% energy efficiency we would more than achieve the 20%. There would be an overachievement and then they would say oh but maybe we won't get the 20% energy efficiency so we need to bring in an energy efficiency directive and that's nearly law now and when that comes in, in fact even as each stage has passed you've been able to track the price of EU allowances going down, part of the downward pressure on EU allowances has been the political progress on what has been a very very stringent energy efficiency directive and to comply with that directive we will have to go substantially beyond what is actually a very good national energy efficiency action plan which was developed under Eamon Ryan who I see in the fifth row there. So overall I think what is, is there a more efficient way of doing it? Is there a counterfactual where there would be in a post 2020 regime one target, a climate target and it drove everything else, it drove energy efficiency obligations because energy efficiency is by far the cheapest way of mitigating climate greenhouse gas emissions and likewise it could it could drive the renewals program. We have a multiplicity of targets and one way of then looking at that just to give a couple of examples are the current level of prices a problem or are they the symptom of the broader problem that I've been talking about? Certainly if there was a much higher price of EU allowances it would make coal less competitive. Now Michael Gruthers and I were at a round table the other week and one of the speakers there, it's from Chatham House, well actually not Chatham House, it was John Mullins said that there would have to be a 40 to 50% increase in the price of coal to change the merit order in the single electricity market here. Now that's a very substantial amount and it would imply to change the merit order it's an all or nothing, you're either in merit or you're not, you would need an enormous increase in the carbon tax here but it could help so that if the price of gas came down and the price of carbon went up it would trip over at an earlier point. It could also a high carbon price have an effect on emerging technologies such as carbon capture and storage which probably would need a price in the range of 50 euros a ton to be commercial although there's also technological development still to be done. But in Ireland at least the cost of EU allowances has only been a secondary driver in the development of wind and I can recall the period towards the end of the pilot phase in 2008 where the price of allowances wasn't at seven euros a ton it was seven cents a ton but the the rollout of wind farms did not slow down in fact it's sped up because it was being driven by a different directives being driven by the renewables directive and we're having feed-in tariffs now the cheapest feed-in tariff is roughly 70 euros a megawatt hour for onshore wind but there are other tariffs for example around about the 90 euro mark for biomass and I think biomass CHP is 130 120 euros so you're talking about a premium of between 30 and 60 euros a megawatt hour you're displacing a megawatt hour of combined cycle gas turbine which has half a ton of CO2 in it so you're actually talking about an implicit carbon price of between 60 and 120 euros a ton. No wonder the price of carbon in the emissions trading scheme is being depressed we are building very expensive carbon technologies not because of climate policy but because of energy policy the policies are overlapping you know that the ends are very very worthy but are the means economically efficient and finally I think I've already mentioned the energy efficiency directive that is going to come in there's no question about it and it will drive much needed retrofit it's going to reduce the demand in the emissions trading sector primarily in industry most of the rest of the economy it's going to be in the non ETS sector but it has already had an effect on EU allowance prices so finally and the analogy I like to use is if you had a chair where each of the legs was constructed by a different directorate the chances are it would wobble and it's at the old cliche that you keep cutting a piece off each leg until it stops wobbling you end up with just the seat and there's no legs left at all so my message is policy coherence the legs need to work together thank you