The Great Debate UK

Europe’s carbon trading system needs radical reform, not stop-gap measures


–Laurens de Vries is an assistant professor, Joern Richstein is a doctoral candidate, Emile Chappin is an assistant professor, and Gerard Dijkema is an associate professor at Delft University of Technology, the Netherlands. The opinions expressed are their own.–

The European Parliament voted on December 10 to delay sales of around 900 million carbon permits for the EU greenhouse-gas Emission Trading System (EU-ETS). The deferral (or so-called back-loading) may help correct the substantial oversupply of permits which have caused the carbon price to fall below 5 euros, a sixth of the price in 2008.

While back-loading will be welcomed by many governments and by the European Commission, the episode underlines that in its current form, the EU-ETS system is simply not fit-for-purpose. Back-loading is a one-time, ad-hoc fix that does not solve the underlying problem of the unpredictability of carbon prices. If governments give away or sell too many carbon permits, the price falls too low – as now – and there is no incentive for companies to reduce emissions.  If too few carbon permits are sold, the price may become unacceptably high, causing economic hardship.

A solution would be to implement a minimum and maximum price for carbon permits.  Such a price collar would be a far more effective tool for limiting carbon emissions, and would be more beneficial for European companies and consumers too. Polluters would have more certainty about recovering investments in emission reduction while the economy would be insulated against excessive price rises.

Big business still not tackling carbon emissions


– Sam Gill is Operational Director  at the Environmental Investment Organisation. The opinions expressed are his own. —

DENMARK/Today’s launch of the Environmental Tracking (ET) UK 100 Carbon Rankings show just how far we have to go in tackling corporate emissions. If the first step is getting trusted, accurate data into the public domain, then 65 percent of the UK’s biggest companies are keeping us in the dark.

from The Great Debate:

States see pushback against carbon trading


-- John Kemp is a Reuters market analyst. The views expressed are his own --

Efforts to implement cap-and-trade programs at state level are faltering, just as policymakers in Washington are struggling to generate enough support to put in place a comprehensive national system.

Recent setbacks in California and Arizona point to growing headwinds against the policy. As cap-and-trade loses momentum and becomes embroiled in bigger political disputes about the size and role of government, opponents are becoming emboldened to try to block the policy completely.

from The Great Debate:

Business must take the lead on carbon management


Léo Apotheker is CEO of SAP. The views expressed are his own.

Most people who followed the Copenhagen climate talks in December will have been disappointed.

While the agreement brokered by the group of countries that included the United States, Brazil, China, India and South Africa and ratified by most of the attending countries is being touted as a success of sorts, it fell far short of the expectations that had built up, and achieved very little in concrete terms.

In the fight against climate change, carbon capture is crucial


chalmers_small- Hannah Chalmers is a postgraduate researcher at the Centre for Environmental Strategy at the University of Surrey. All views expressed are her own -

This week the International Energy Agency launched a series of detailed technology roadmaps covering 19 technologies that are expected to be important in mitigating the risk of dangerous of climate change. One of these was for carbon capture and storage (CCS).

from The Great Debate:

U.S. cap-and-trade choice inferior to carbon tax

John Kemp Great Debate-- John Kemp is a Reuters columnist. The views expressed are his own --

President Barack Obama's first budget puts climate change at the heart of the administration's long-term economic plan. But despite the clear theoretical advantages of a simple carbon tax, he seems set to follow the EU and California in opting for a cap-and-trade system.

The budget plan commits the administration to work with Congress on an economy-wide emissions reductions program, based around cap-and-trade.

from The Great Debate:

Clean energy investment needs greener light

-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

paul-taylorInvestors in clean energy are like motorists stuck at broken traffic lights. The public policy light is green but the price and credit lights are deep red.

Investment in wind, wave and solar power should be booming after the European Union last year adopted an ambitious goal to draw 20 percent of its energy from renewable sources by 2020 to help fight global warming, and U.S. President Barack Obama made green power a central plank of his government's policy.