• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
The climate news that makes a difference.
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
  FEATURED
13 Canadian Fossils Linked to Massive Losses in Western Wildfires May 29, 2023
Hamilton Plans Canada’s First Heat Bylaw for Rental Housing May 29, 2023
UK Traffic Calming Strategy Produces Solid Results, Manufactured Anxiety May 29, 2023
Community Wind Farm Earns Support, Generates Income in German Village May 29, 2023
‘Remarkable Rebuke’: 130 U.S, EU Legislators Ask UN to Ditch Fossil CEO as COP 28 Chair May 23, 2023
Next
Prev

Europe's carbon scheme goes up in smoke

January 27, 2013
Reading time: 4 minutes
Primary Author: Paul Brown

 

EMBARGOED until 0001 GMT on Sunday 27 January
Europe’s attempt to tackle climate change by giving carbon a value which would encourage industry to cut greenhouse emissions is struggling for survival.

LONDON, 27 January – Carbon trading, one of the major European Union policies designed to combat climate change, is failing. A combination of successful lobbying by industry bodies, political interference and lack of economic growth has wrecked the scheme.

  • The climate news you need. Subscribe now to our engaging new weekly digest.
  • You’ll receive exclusive, never-before-seen-content, distilled and delivered to your inbox every weekend.
  • The Weekender: Succinct, solutions-focused, and designed with the discerning reader in mind.
Subscribe

It is now cheaper to pollute the atmosphere than to invest in becoming energy-efficient.

Another blow came on Thursday (25 January) when a committee of European MPs voted down a scheme to rescue the carbon trading scheme. But there may still be a slim chance to save it.

The Environment Committee of the European Parliament is likely to be more sympathetic to a rescue package when it votes on 19 February, and with so much depending on the outcome there is potential for the whole Parliament to discuss support for the scheme in March.

The original idea of the EU emissions trading system (or scheme), the ETS, was to set a maximum cap on carbon emissions from each factory or power station. This would force industry to become more efficient or to pay a high price for every extra tonne of carbon over the limit.

Industries would gain credits for reducing their emissions below the set limit and then sell them on the open market to polluters who had failed to act. The plan was to reward those who spent the money they earned on new technology or other efficiency measures.

Hitting the floor

The whole system depended on the price of the units of carbon being high enough to give polluters an incentive to reduce their emissions – but the price has now collapsed to an all-time low.

The scheme was launched on 1 January 2005 with caps on 11,500 plants across the 25 EU countries, amid high hopes that the market for carbon would help the European Union towards a 20% reduction in greenhouse gas emissions by 2020.

Carbon markets were set up to trade these notional units of tonnes of carbon saved. Analysts believed that the price needed to be between 20 and 50 euros a tonne to provide sufficient incentive for industry to become more efficient.

Despite early signs of success – when the price peaked at 30 euros a tonne in the summer of 2008 – the price of carbon never held up to the required level.  In April 2010 the price had dropped to 15.30 euros a tonne when Germany sold 300,000 carbon permits. From there it continued to drift down and earlier this month dropped below five euros for the first time. It had become decidedly cheaper to pollute than to become efficient.

On Thursday the price briefly plunged further, to 2.81 euros, after a vote by the European Parliament Energy and Industry committee to support prices by withdrawing permits from the market and reintroducing them later.  Members of the committee had been intensively lobbied by the European Steel Association (Eurofer).

“Profit-making and not fighting climate change has become the overriding objective of the players involved in carbon trading.”

This combination of successful lobbying by industry bodies and subsequent political interference has undermined the scheme. Special pleading that EU companies would be made uncompetitive if they had to pay too much for carbon credits, or spend too much on efficiency, meant that many industries were set emission caps that were too lenient.

In fact some were set so high that the industries stayed well below them without taking any efficiency measures at all.  They therefore gained carbon credits simply by lobbying governments and were able to profit by selling them.

While the carbon trading scheme was not a disaster in all sectors and all countries, it has failed to achieve its objectives. This has been worsened because, built into the scheme, were forecasts for economic growth which were not fulfilled.

The European Commission failed to adjust the trading scheme to fit these new circumstances, and as a result there are now so many unsold carbon credits on the market that it is hard to see how the price could recover.

The EU began looking at ways to rescue its flagship policy by withholding unused credits and releasing them onto the market later, or simply cancelling millions of them. Germany is lukewarm on these rescue plans and some governments are outright opposed, for example Poland, which has a large coal industry and would lose sales if polluting factories were penalised.

Abolition calls

 

However, the European Commission has warned that the scheme could become irrelevant unless parties agree a rescue plan. “This should be the final wake-up call both to governments and the European Parliament,” EU Climate Commissioner Connie Hedegaard said.

Not all of industry is opposed to the system. Royal Dutch Shell’s environment advisor David Hone said what was needed was a clear price on carbon rather than a volatile and unpredictable market.

Some non-government organisations are scathing about the chances of EU efforts pushing the price of carbon back up and believe the whole system is so discredited it should be abolished.

Joanna Cabello from Carbon Trade Watch said: “The ETS is not fit for purpose. It has generated windfall profits for polluting corporations, postponed the needed transition away from fossil fuels, and its unintended consequences are locking the EU into another generation of energy production based on fossil fuels. These structural flaws remain unaddressed by the Commission.

“Instead of taking their responsibility, politicians have voluntarily put their main instrument to fight climate change in the hands of the financial markets. As we know, market mechanisms have their own dynamic. Profit-making and not fighting climate change has become the overriding objective of the players involved in carbon trading.”

She said it was an illusion to believe that proposals by the Commission would be able to improve the scheme substantially. – Climate News Network



in Climate News Network

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

moerschy / Pixabay
Biodiversity & Habitat

Planetary Weight Study Shows Humans Taking Most of Earth’s Resources

March 19, 2023
42
U.S. Geological Survey/wikimedia commons
Biodiversity & Habitat

Climate Change Amplifies Risk of ‘Insect Apocalypse’

December 1, 2022
56
Alaa Abd El-Fatah/wikimedia commons
COP Conferences

Rights Abuses, Intrusive Conference App Put Egypt Under Spotlight as COP 27 Host

November 14, 2022
29

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

Neal Alderson/Twitter

Out-of-Control Wildfire Burns Homes, Forces Evacuations Outside Halifax

May 29, 2023
91
pixabay

Anti-Mob Laws to Prosecute Fossils, Kudos for Calgary, 113M Climate Refugees, Orcas Fight Back, and a Climate Dictionary

May 24, 2023
135
Inspiration 4 Photos/flickr

Cooling Upper Atmosphere Has Scientists ‘Very Worried’

May 23, 2023
274
University of Oxford Press Office/flickr

PEROVSKITES: Qcells Plans First Production Line for ‘Miracle’ Solar Cell

May 23, 2023
435
Arctic Circle/flickr

‘Remarkable Rebuke’: 130 U.S, EU Legislators Ask UN to Ditch Fossil CEO as COP 28 Chair

May 23, 2023
400
François GOGLINS/wikimedia commons

Corrosion Problem Shutters Half of France’s Nuclear Reactors

August 2, 2022
3.7k

Recent Posts

Martin Davis/Facebook

13 Canadian Fossils Linked to Massive Losses in Western Wildfires

May 29, 2023
5
York Region/flickr

Hamilton Plans Canada’s First Heat Bylaw for Rental Housing

May 29, 2023
4
Jörg Möller/Pixabay

UK Traffic Calming Strategy Produces Solid Results, Manufactured Anxiety

May 29, 2023
3

Waste Heat from Quebec Data Centre to Grow 80,000 Tonnes of Veggies Per Year

May 29, 2023
8
kpgolfpro/Pixabay

Community Wind Farm Earns Support, Generates Income in German Village

May 29, 2023
9
Pexels/pixabay

Engineers Replace Sand in Concrete with Disposable Diapers

May 29, 2023
7
Next Post

Researchers unravel Greenland ice riddle

The Energy Mix - The climate news you need

Copyright 2023 © Energy Mix Productions Inc. All rights reserved.

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Proudly partnering with…

scf_withtagline
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}