The European Union’s cap-and-trade system took a huge hit on Thursday, with carbon prices plummeting a record 40 percent after a panel rejected a plan to delay emission permit sales to alleviate the overabundance of permits already in the system.
“The market is panicking, really,” Daniel Rossetto, managing director of Climate Mundial, told Bloomberg, adding that traders fear that Europe’s carbon emissions market won’t continue past 2020.
An excess of carbon emission permits in the 54 billion euro trading system drove the price down 91 percent from its record high in April 2006. Carbon permit prices sank to a record low of 2.81 euros ($3.75) per metric ton immediately after the panel rejected the EU plan. However, prices slightly rebounded to 4.33 euros per metric ton.
‘The European Commission wanted to temporarily delay the sale of 900 million permits to alleviate the current overabundance. Analysts say this move would have boosted prices, but not high enough to provide sufficient incentives for utilities to switch to cleaner energy sources, reports the Guardian.
However, the plan was met with resistance from various governments, industries, and lawmakers.’
The article does not name the ‘various governments, industries and lawmakers’ that were responsible for this here, but I can imagine it would be in the interests of various departments, associations and businesses to keep this burdensome, inefficient and unnecessary imposition from having too great an impact upon the manner in which these organisations conduct their routine affairs. Conspiring to keep the price of these ‘permits’ (the modern-day equivalent of ‘indulgences’) low by flooding the E.U. market with them is one way to sabotage the system from within, and so hopefully (fingers crossed) those who were responsible for introducing this misguided scheme will wake up, get the message, and decide that the best way to fix this problem is to abolish it altogether.
By the way, the Union flag (above) is the wrong shade of blue. It should be much darker, a shade similar to indigo.
Sorry about the shade of the EU flag. It’s close enough for us dumb Americans. After being exposed to this for a while, flag specifics start to lose meaning: http://onthenorthriver.files.wordpress.com/2012/03/obama_american_flag.jpg
I commend you, at least, for not posting a Hitler Obama, or a hammer and sickle Obama flag, cuz I’m sure they exist readily somewhere. As Peter says below, there’s hope…I guess. Not sure how you became “exposed to [it] for awhile” unless you exposed yourself to it for awhile.
I must be going blind or something, because they actually do mention at least one name – Joachim Pfeiffer, the ‘economy spokesperson for German Chancellor Angela Merkel’s party’. The German government at least has the sense to recognize a bad deal when it comes across one, so there is still hope 🙂