Jan 13 2017

Airbrushing history

The Impact Assessment says,

“The first call’s cycle lasted 25 months and this may seem as too long, but one has to bear in mind that the first call was also a learning curve for all involved parties. Considerable improvements, due to the streamlining of the process, were made during the second call and that lead (sic) to a much shorter cycle of 15 months.”

These sentences, while not strictly wrong, misrepresent the reason for the length of time to launch and conclude the first call. The circumstances that led to the protracted timing were never likely to be repeated in the second call or indeed in any subsequent call. This is because the delays were due to poor coordination with the process to set up the ‘single union registry’ for carbon allowances, which only needed to be done once.

The monetisation of the 200 million NER allowances for the first call could only begin with the registry in place (Bloomberg article 9 Nov 2011) and it was set up late. Within a couple of days of the adoption on 18 Nov 2011 of the regulation establishing the registry, the EC confirmed that it would “proceed swiftly with the European Investment Bank (EIB) to account opening to enable the delivery of allowances before the end of the month” (statement by Jos Delbeke).

Thus the start of the monetisation was pushed back, with a knock-on effect on the timing of the selection process (see official Summary Record of Climate Committee Meeting 14 Dec 2011).

The delays that the first call of NER300 would face were apparent to the EC even before it was launched. The EC updated the text of the Decision that had been signed off by Member States on 2 Feb 2010 (here) to extend an important NER300 deadline. Projects would no longer have to enter into operation no later than 31 Dec 2015, but within four years of the award decision.