|Carbon Tax vs Europe's ETS|
Europe's cap-and-trade system for reducing the release of greenhouse gases is broken, but not everybody wants to fix it. Industry has profited immensely from the plummeting prices of CO2 emissions certificates, and from lax checks on questionable environmental projects undertaken overseas.The describe how Energy Company RWE (link) made frequent trips to Zambia with stoves that were intended to help poor families cook in a more environmentally friendly way. The rider is: (link)
.....the project wasn't entirely altruistic, because RWE will receive credits for its effort. The stoves in Lusaka are expected to save 1.5 million tons of CO2 by 2020, and in return, RWE's coal-fired power plants would be allowed to emit 1.5 million tons elsewhere.Eva Filzmoser of Carbon Market Watch in Brussels declared the Carbon Dioxide trading Market a big flop.
In the end, the flood of such projects undermines the entire emissions trading system. "The most important tool of climate protection no longer works," says Eva Filzmoser of Carbon Market Watch in Brussels. Four years ago, the Austrian national began a solo effort to take a closer look at the emissions trading market. She still believed in the idea at the time. But Filzmoser found herself confronted with an industry that had grown to a volume of $90 billion almost overnight, an industry complete with certifiers, forecasters, dealers and hackers, who trafficked in certificates and created more and more absurd projects.Meanwhile, European Union’s energy commissioner, Gunther Oettinger has said that, "For Europe to remain in the game, energy taxes must be held in check and no new taxes levied." (link)
Europe is in a quandary. For years, it has claimed to be a global leader in fighting climate change and slashing carbon emissions. Now it finds itself running out of conventional gas and turning back to dirty (sic) coal. Oettinger said onshore and North Sea gas deposits will be depleted by 2035 or 2040. Coal is cheap not only because U.S. supplies are sold at bargain prices but because the penalty for emitting too much carbon has become almost insignificant.
Europe’s cap-and-trade program is meant to make it expensive for industry to pollute (they mean emit vital-to-life CO2 - non-pollution). Industries that emit more carbon dioxide than permitted must buy
pollutionpermits from facilities that release less CO2 than allowed. The market price is determined by the availability of those permits.
In practice, the economic recession has led to an industrial slowdown, less emissions and an overabundance of permits for sale. Thus, the price of carbon has collapsed to less than €5 per ton.
“Coal has become a new and economically interesting input for power production in the E.U.,” says the paper.
H/t Benny Peiser