The energy crisis and Russia's invasion of Ukraine highlight the importance of alternative energy sources and rapid decarbonisation in the EU in order to ensure greater environmental justice in cities and municipalities, and to avoid inequalities caused by energy crises. By adopting an opinion at the CoR plenary session on 28 April calling for the Emissions Trading Scheme (ETS) and the Carbon Border Adjustment Mechanism (CBAM) to be adapted to the needs of EU cities and regions, the members of the European Committee of the Regions (CoR) sent a clear signal.
The Russian invasion of Ukraine and the associated energy crisis in Europe have made it clear that the EU's independence from external energy suppliers can be achieved first and foremost through the EU's environmental ambitions, such as the Fit For 55 package and the transition to a green and decentralised energy supply. Carbon pricing and actual decarbonisation are effective tools for this transition.
In the opinion on Making the ETS and CBAM work for EU cities and regions, CoR members call for a socially just transition to sustainable energy in regions and cities. To this end, funds from the EU Modernisation Fund, which aims to improve energy efficiency, should be opened up to the regional level in order to ensure that carbon taxation contributes to the EU's territorial cohesion rather than hampering it.
Peter Kurz, mayor of Mannheim and rapporteur for this opinion, said: "The solution to the war in Ukraine cannot be to call into question the effective tools of the transformation, in particular carbon pricing. On the contrary, the war only confirms our long-standing belief that we need to abandon fossil fuels and that we must do so in a way that ensures that the transition leaves no one and no region behind. We need to ensure that the "Fit for 55" package for cities and regions works by including them both in the revised and new Emissions Trading System and in the creation of the Carbon Border Adjustment Mechanism, while protecting the most vulnerable groups and territories through a social climate fund."
Representatives from regions and cities also stressed the need to take into account local and regional authorities when accessing and reviewing the new ETS and the need for effective cooperation between the ETS and the CBAM in order to ensure a climate-neutral and competitive economy in the regions of the EU. The potential distributional impact of carbon pricing should be designed fairly according to the following three principles: there should be solidarity and fairness between the Member States, as well as within Member States, when it comes to implementing the ETS and the CBAM, and attention must be paid to managing the territorial impact of these measures, particularly in regions that are already experiencing far-ranging changes through their social and economic development.
Local and regional authorities play an important role in implementing climate change mitigation measures, in particular with regard to the new ETS for the road and buildings sector. Local and regional leaders therefore call for regions and cities to be involved in the distribution of ETS revenues and for at least 20% of the revenues from auctions of ETS allowances to be managed by local and regional authorities. It is also important that the revenues of the reformed ETS be used to finance climate action.
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