Roseanna Cunningham MSP, the Cabinet Secretary for Environment, Climate Change and Land Reform yesterday gave a statement to Parliament on The Scottish Greenhouse Gas Emissions Annual Target Report for 2015. Graeme took the opportunity to raise with the Cabinet Secretary Scotland’s ability to participate in the European Union’s Emissions Trading System once the UK leaves the EU.
Graeme Dey (Angus South) (SNP):
As the cabinet secretary is aware, the EU emissions trading system is the main mechanism to reduce emissions in the traded sector. Therefore, it plays a key role in supporting our climate change ambitions. Will she advise how our ability to continue in the ETS will be impacted if the UK leaves the EU, and whether she is aware of any work that is being done by the UK Government to address that?
Roseanna Cunningham:
Graeme Dey is correct to raise the EU ETS, which is currently the world’s largest carbon market. It means that there is a level playing field for businesses throughout the EU and it protects us against carbon leakage, which is a considerable matter that needs to be addressed. The Government therefore considers that continued participation in the ETS will be best for Scotland, in the future. It is the most cost-effective means through which the traded sector can decarbonise.
It is a matter of some concern that the UK Government has, until this point, been unwilling to discuss future participation in the ET with me or other Scottish ministers. Indeed, the EU has now intervened to protect the integrity of the scheme with legislative proposals to prevent surrender of any new allowances that will be allocated after 1 January 2018 to a member state in respect of which there are lapsing obligations. Of course, only one state is in that frame.
That intervention could have significant repercussions for Scottish businesses and could impose additional costs. There is significant market reaction. That demonstrates the risks of the UK Government’s approach to the negotiations and the real risk of a disorderly exit, which I am sure that members will agree would be a wholly unacceptable situation. I should add that Mr Russell and I have written jointly to the Secretary of State for Business, Energy and Industrial Strategy seeking urgent discussions on that matter.
