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Carbon Pricing - we can make it better - Preparatory Document

The European Citizens Initiative for a carbon pricing in the European Union: theory and practice.
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Carbon Pricing - we can make it better - Preparatory Document

Post by VirginiaFiume »

22/07/21 Closing Meeting: Preparatory Document

Hosted by EUMANS - the movement of citizens for democracy and sustainability

The civic initiative for a carbon pricing - from the European Union to COP26

Promoted by the citizens movement EUMANS
For info:
Register here to attend the meeting

Here below is the full text of the ECI petition, the foundation around which we formed the Initiative back in July 2019.

The European Citizens Initiative

The proposal was officially submitted on 22nd of July 2019 as a European Citizens Initiative to the European Commission. The European Citizens Initiative is an official participatory democracy instrument provided by the European Union.

Official website:

1. Title
A price for carbon to fight climate change
2. Object
We ask the European Commission to propose EU legislation to discourage the consumption of fossil fuels, encourage energy saving and the use of renewable sources for fighting global warming and limiting temperature increase to 1,5°C.
3. Main objectives
Our proposal introduces a minimum price on C02 emissions, starting from 50€ per CO2 tonne from 2020 up to 100€ by 2025.
At the same time, the proposal shall abolish the existing system of free allowances to EU polluters and introduce a border adjustment mechanism on non-EU imports, in such a way as to compensate for the lower pricing on CO2 emissions in the exporting country.
The higher revenue deriving from carbon pricing shall be allocated to European policies that support energy saving and the use of renewable sources, and to the reduction of taxation on lower incomes.
4. Legal Basis
Article 192 (1)(2) of the TFUE

On 24th June, we hosted a High End Carbon Pricing Event, to bring together economic and scientific experts on the subject. The conclusions of this discussion were collected together in this scientific evaluation by Andrea Salimbeni.


Watch the recording of the event organised in the context of the Conference on the Future of Europe

by Andrea Salimbeni

It is a common belief in economic circles that carbon pricing represents the great challenge of this decade. The European Union Emissions Trading Scheme is the world's largest carbon pricing system; therefore, Europe plays a leading role in the development of an effective solution to put a price on pollution at the global scale. Despite having now been in use for 15 years, the ETS has demonstrated itself to be inefficient in ensuring a relevant reduction of GHG emissions. Many experts agree that this inefficiency was due to the high number of free allowances ensured by the ETS to large polluting sectors like energy, steel, and concrete. It is also recognised, as a major bottleneck of the ETS, that only a few sectors have been included as ETS sectors so far. In fact, incineration, aviation, and many other polluting industry sectors are still not included in the EU ETS.

In short, there are too few sectors included, and a too high number of free allowances ensured by the European Commission. As a result, within the trading system, CO2 demand has remained low, the price of CO2 hasn't risen enough and, by consequence, CO2 concentration in the atmosphere is still rising.

The reasons for this inefficacy can be summarised in a common approach: the suggestion that we must preserve the competitiveness of EU industry against non-EU competitors.

In the upcoming ETS phase 4, Europe is being called to demonstrate the efficacy of its emissions trading system. Two instruments are considered crucial for the required target: the Market Stability Reserve (MSR), and the Carbon Border Adjustment Mechanism (CBAM). The instruments can ensure a minimum price of CO2, and a competitiveness of EU industries respectively. However, the implementation of these new measures is encountering several obstacles and delays, reducing the time available to meet the 1.5°C target.

After 2 years of campaigning, 70,000 signatures and a wide range of debates, recognises the role, but also the limitations of the ETS in ensuring effective carbon pricing, and proposes to work with a global scale vision, based on three main pillars.

Emission trading systems can represent an alternative to taxation, but they must provide a minimum price to CO2, to be no lower than 50 €/t
All main pollution sectors must be included in any carbon pricing system, starting from transportation, building and incineration
A global emission pricing system must be implemented, so that the Carbon Border Adjustment Mechanism can be effective, and applicable.
The main risk of a global initiative is the penalisation of the poorest and developing countries. However, it is also true that less developed countries have lower CO2 emissions per capita. Therefore, we rather believe that a well done emissions pricing system can play a strong role in the economic development of eastern, and african countries.

To prepare for the future of the movement, Professor Alberto Majocchi, scientific lead for the ECI campaign, wrote a proposal for the Global Implementation of Carbon Pricing

DRAFT GLOBAL PROPOSAL FOR CARBON PRICING BY ALBERTO MAJOCCHI, Professor of Public Finance, Universitá degli Studi di Pavia, Italy - Scientific Lead of the campaign

Europe should come to COP 26 having extended a carbon pricing system to all sectors. My preference, as I have said many times, is to extend the ETS to transport and heating, following the German model which, using an upstream approach, i.e. making those who import or produce the fuel buy the permits and then sell it at the pump or to households and businesses for heating, is effectively equivalent to a carbon tax. In any case what is important is to charge a price even in these sectors. Agriculture would be excluded, but about 90% of emissions would pay a price.
At COP26, Europe should arrive having adopted a border carbon adjustment mechanism. Its policy proposal should be simple and straightforward. To combat climate change, the most effective tool is generalised carbon pricing. Europe has introduced it, and wants to push the COP to take a position on a multilateral agreement to introduce minimum carbon pricing in all countries of the world (along the lines of the minimum global tax on corporations proposed by Biden). If someone does not comply, they will pay the border carbon adjustment at the border, with a two-fold disadvantage: they will not be able to dump on the European market and, moreover, they will enrich the EU coffers with the proceeds of the BCA and not their own.
This project must be accompanied by the activation of the 100 billion fund for fair burden sharing, already promised to the poorest countries at COP15 in 2009. In order to finance this fund, we could adopt Rajan's proposal, which envisages a contribution to be imposed on countries that emit more than the world average (more than 5 tonnes per capita in Rajan's proposal) and with this to finance countries with lower than average emissions. The weakest countries could then be helped to finance the ecological transition, while the distributive fairness measures would remain the responsibility of the individual countries.
With a proposal of this kind - generalised carbon pricing for all sectors, border carbon adjustment for countries that do not adhere to a multilateral proposal for minimum carbon pricing and, finally, a Rajan-style fund for fair burden sharing - I believe that the European Union can come to COP 26 with a strong and realistic idea. The new climate created by the Biden administration could favour an agreement at least at the transatlantic level.
Coordinator of EUMANS
Andrea salimbeni
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Re: Carbon Pricing - we can make it better - Preparatory Document

Post by Andrea salimbeni »

Dear All,

i am fine with the proposed text and topic to discuss.

Just a mistake in my text: we've got 60000, not 70000 signatures :(

Regarding the event, i will/should be in greece on the 22nd, but i will try to be there!