Wednesday, April 17, 2013

Failed Emissions Trading Reform: 'The End of a European Climate Policy'

And why is this happening?  The German economy is in recession.  No one wants to build.  And when you decide not to build, who is going to buy your carbon credits?  CA, this is your future.
Matthes: Europe's Emissions Trading System is very generous in recognizing emissions reduction certificates from projects in China and other places as equal measures. So 1.5 billion certificates have flooded into the system, which you can see in today's current prices of just a few cents. There's no real emissions reduction there. We in Europe always assumed that the price could never realistically fall below €10. Now there are certificates for 30 cents and less. All together that means that there's a surplus of 2 billion certificates in the system. That just about corresponds to the annual CO2 emission of all regulated facilities. The tightening (of certificates) would have been a signal to the markets and the world that an effective emissions trading system will be in place beyond 2020, and it would have built the decisive framework for a long-term climate policy. The European Parliament has squandered this chance.

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