The EU Emissions Trading Scheme is in crisis. Yesterday, the European Parliament voted against the backloading proposal which was aimed at increasing the price of carbon permits. After the vote, the price of carbon permits dropped by about 40% to its lowest ever price of €2.63. New Energy Finance predicts that it might fall as low as €1.
“No amount of structural tinkering will get away from the fact that the EU has chosen the wrong tool to reduce emissions in Europe. It is inherently too weak to get the EU to where it needs to be in the necessary timescale,” says Hannah Mowat from FERN. “The EU can no longer wait for the market to deliver.”
In an attempt to revive carbon prices in the EU Emissions Trading Scheme, the European Parliament’s Environment Committee voted yesterday in favour of postponing the auctioning of 900 million pollution allowances. The market’s reaction to the vote? A 20% slump in the price of EU allowances.
Last year, emissions of carbon dioxide increased by 3.2% to 31.6 billion tonnes, according to figures released by the International Energy Agency. Fatih Birol, IEA’s chief economist told Reuters that, “[T]he trend is perfectly in line with a temperature increase of 6 degrees Celsius (towards the end of this century), which would have devastating consequences for the planet.”
The agreement that came out of the Conference of Polluters (COP-17) in Durban included no new commitments to reduce emissions. “What we got instead was a clear signal that we might get another clear signal in 2015,” as Jonathan Grant, director of carbon markets and climate policy at PricewaterhouseCoopers told the Financial Times.
A new report by the Environmental Investigation Agency confirms that logs from Laos continue to pour over the border into Vietnam feeding a booming furniture industry there, despite a ban on exports of unprocessed timber from Laos. This illegal trade has serious implications for REDD in both countries.
The European Trading System suspended spot trading in carbon credits on 19 January 2011, after 475,000 EU carbon dioxide emissions allowances (EUAs) were stolen from the Czech Republic’s carbon registry. The theft was discovered at 8:00 a.m. on 19 January 2011, by which time the thieves had already sold the credits.
From 7-9 September 2009, environment ministers and senior officials from the European Union took part in a high-level meeting in Strömstad, Sweden: “Visions for Biodiversity Beyond 2010 – People, Ecosystem Services and the Climate Crisis“. At the end of the meeting, the chair produced a series of conclusions.