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Topic: ETS

[Episode #193] – Harmonizing EU and US Climate Policies

As the European Union and the United States work toward stronger climate policies, their two divergent approaches are creating tension. The EU has opted for a mix of rewards and penalties to incentivize green industries while also taxing carbon emissions from domestic industries - a “carrots and sticks” approach. On the other hand, the US is only offering rewards because Congress can't assemble a sufficient majority to agree on taxing carbon emissions from its industries; in other words, a carrots-only approach.

These contrasting approaches to climate policy have agitated trade discussions between the US and Europe, as shown by the recent passage of the $369 billion Inflation Reduction Act in the US, which European leaders worry might make their trade position weaker.

But another policy is now rising to the forefront as a source of trade tension: Europe's Carbon Border Adjustment Mechanism (or CBAM), which will impose tariffs on goods imported to Europe based on their embedded carbon emissions. The CBAM works to prevent "carbon leakage" by ensuring that European producers who pay carbon taxes won't be disadvantaged compared to others who don't.

In this conversation, we are joined by Noah Kaufman, an economist and research scholar at SIPA’s Center on Global Energy Policy at Columbia University who served in the White House under both President Biden and President Obama, to discuss the challenges of accounting for the embedded carbon emissions in various goods, as well as how the EU and the US can find common ground and harmonize their climate policies.

Geek rating: 2

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[Episode #76] – Carbon Clampdown

The European Emissions Trading System (EU-ETS) has famously been dysfunctional for most of the past decade, unable to support a carbon price that would be an effective tool for energy transition. But that’s about to change: the EU is embarking on a plan to fix its carbon trading market. But will this be enough? According to calculations by our guest in this episode, there is reason to hope that the emissions trading surplus will be removed by 2023 and carbon prices will rise back to a meaningful level, but that may still not be high enough to meet the goals of the Paris climate agreement. So what can be done about it? Will the prospect of Brexit ruin the EU-ETS market? Can carbon prices rise high enough to sustain carbon capture and sequestration technologies? Will we even need carbon prices in the future, given the falling costs of wind and solar? Are asset managers finally getting smart about understanding the risk of stranded fossil fuel assets in their portfolios? And are risk assessors finally beginning to grapple with climate risk?

Mark Lewis, now Head of Research and Managing Director at Carbon Tracker, returns in this episode to dig into details of European carbon market reform and explain what it all means…as well as outlining a fresh way of looking at services delivered by different energy sources, and the implications of this perspective for the oil sector in particular.

Geek rating: 8

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[Episode #47] – Transition in Europe

Europe has been the global leader in energy transition for decades, offering to the rest of the world many useful examples of both policies that work and those that don’t. As a result, European countries now have some of the world’s most energy efficient economies, and the largest shares of renewable energy. But getting there wasn’t easy, and still isn’t. From the very first efforts to develop policies that would support energy transition decades ago, right up to the present, there have been incumbents in the energy industry establishment who fought transition every step of the way, both overtly and through subversion. To help us understand this long and complex history, our guest in this episode is Claude Turmes, a Member of the Greens for Luxembourg in the European Parliament who has had a front-row seat in Europe’s energy transition policy formulation for over 15 years, and the author of a new book about it titled Energy Transformation: An Opportunity for Europe.

Geek rating: 2

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