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Breath Of Life For Europe’s Emissions Scheme
Whether Europe can truly fix its broken emissions trading system remains to be seen, but for now, at least, it isn’t prepared to see the thing die. Instituted in 2005, the Emissions Trading System was intended as a key mechanism for driving down the amount of CO2 that EU countries were spewing into the atmosphere. The idea was that over time, the ceiling would gradually be lowered, in the process allowing market forces to find the best emissions-reducing mechanisms as companies traded permits to release greenhouse gases. But then the Great Recession happened. Slow economic growth (and even retraction) since 2008 has left Europe awash in carbon allowances, with prices too low to incentivize investment in low-carbon technologies. Still, by passing the fix the EU parliament avoided virtually abandoning the system. “Across all continents, Europe’s experience of a market-based system for reducing CO2 emissions is being considered, and seen as a credible option, as most recently in China. We shall not let the ETS be the victim of short-term concerns. Structural reform of our Emissions Trading System will follow to ensure it remains the cornerstone of EU’s climate policy.” Continue reading
