Copy email, 17 July 2014.
Dear Secretary of State,
I read with interest your new memorandum discussing ways forward on Europe’s greenhouse gas cap and trade regime (EU ETS).
While some UK positions are good ones, especially a more stringent annual linear reduction factor, nonetheless others require at least clarification.
In particular the call for “cancellation of an ambitious volume of allowances” already in the market is a particular concern since, without further explanation on how to do this, it suggests that the UK is proposing the confiscation of private property.
Once allocated, by auction or otherwise, ETS allowances are essentially assets owned by non-public undertakings. Under current law at least, such allowances can be ‘banked’ from year to year until such time as they are sold or surrendered.
Please could you provide an assurance that the UK is not in fact proposing the confiscation of private property by explaining alternatively how the EU legislator (Parliament and Council) could act to cancel allowances already circulating in the market?
Without such an explanation, maintaining an essentially unworkable policy proposal is I believe only a distraction from an otherwise important policy debate. More generally the UK’s climate strategy is weakened by playing a poor game at EU level.
Finally, since the rule of law and the potential confiscation of assets are important matters of public interest, I am also published this letter on my blog. In due course I will be pleased to publish alongside any reply you provide.
Thanks in advance for your attention to this enquiry.
UPDATE 31 July: You can read DECC’s reply here.