EurActiv - Letters to the Editor

Sir,

Regarding ‘Draft emissions data bodes well for EU carbon market‘:

I think we could all have predicted that 2008 would show lower emissions than 2007, as manufacturing across the EU contracted sharply. It has little to do with the efficacy of the carbon trading system, which is about allowing business as usual for polluting firms for as long as possible.

Furthermore, the recession has caused a remarkable drop in the value of carbon, which will reduce the incentive for further reductions and restructuring, just when we need it most – and have the opportunity.

Carbon trading is a US policy designed for sulphur dioxide (very different to carbon) which was adopted by Kyoto and hence Europe, to try and get the Americans on board.

It didn’t work, and now we have an unnecessarily complicated, market-based system which is more about delaying the inevitable than real progress.

Alasdair Cameron

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Comments

  1. I would also add: the nature of the system – with delayed settlement (the current settlement date is December 09) allows high levels of leverage and thus has low entry barriers. In turn this fosters a climate of speculation, as EUAs are traded. I am sure that as this market grows we will soon hear the aptter of tiny derivative feet as “the market” spawns some “innovative” “instruments” (sound familiar?). The Polish suggestion of trading bands was rubbished late last year – it now looks quite sensible. Either that or 10 day settlement system – to cut out the speculators.

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