Emissions cuts could hurt emissions trading

June 3, 2011 at 9:08 am Leave a comment

A recent World Bank report said the world’s carbon markets were in bad shape. The Guardian said the market had “suffered an almost total collapse” in 2010.

Admist the gloom, Europe’s Emissions Trading System (ETS) was purported to be the standout. Europe accounted for 97% of the world trade in pollution. Its rarely noted in mainstream coverage, but this “successful” scheme has failed to cut emissions yet has allowed big polluters to make billions of euros in windfall profits.

But the European Commission has identified a potential problem the ETS hasn’t really faced before — actual cuts in emissions.

The Guardian said:

“But the future of the EU’s emissions trading system (ETS) is also in doubt, according to leaked documents. If the EU meets its target of improving energy efficiency by 20% by 2020, then the price of carbon permits under its trading system is likely to fall dramatically. This will in turn make it less financially attractive for companies to invest in low-carbon technologies …

“The European commission said: “Energy efficiency is key to reduce emissions. All energy efficiency measures are welcome. This said, we have to make sure that the energy measures are compatible with the ETS. This is why the commission proposed in the 2050 roadmap to recalibrate the ETS cap and set aside a number – to be determined – of [carbon] allowances for the next phase of the ETS from 2013 to 2020.”

That’s right. A very modest energy efficiency drive, which would cut emissions, could cause the bottom to fall out of the market. Some of Europe’s biggest polluters, along with the carbon trading industry, are agitating for the European Commission to water down its energy saving programs … lest the pollution market be damaged.

Carbon markets are supposed to be a solution to the climate crisis. But they are really a dangerous distraction.

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Entry filed under: Carbon trading scheme.

World emissions rise, carbon markets fail Green groups and dirty money

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