Europe risks carbon permit flood
Carbon budgets are at risk from a plethora of permits in the market, according to energy minister Chris Huhne.
New research revealed today (July 6) an estimated 1.9 billion tonne oversupply by 2020 of carbon permits in European Union Emissions Trading System (ETS).
According to the Sandbag Climate Campaign 77% of installations covered by ETS currently have a surplus of carbon permits.
As in any initiative if supply exceeds demand prices go up, which would make low carbon technologies more financially attractive to business in the future.
However, the fear is with more permits available than initially anticipated, big business could just buy its way out of environmental responsibility.
The research is revealed in the report 'Buckle Up! Tighten the cap and avoid the carbon crash', which provides a comprehensive analysis of the environmental performance of Europe's ETS so far.
It finds the oversupply of permits to industrial installations has created a dangerous legacy, leaving Europe off-track on intended abatement by the equivalent of a whole year's worth of emissions covered by the scheme.
Energy minister, Chris Huhne, said: "The oversupply threatens the UK's own carbon budget, which was recently passed on condition that a review in 2014 assess how far Europe was matching ambition on climate change.
"Europe's flagship climate policy of emissions trading is potentially powerful but it may do more harm than good with a weak cap undermining other policies and national efforts.
Sandbag's founding director, Baroness Worthington, added: "If Brussels fails to reform the ETS then it is setting up Europe to fail when it could so easily be leading the world.
"We urge politicians across Europe to support tightening the cap so that the Emissions Trading System can deliver a low-carbon Europe."