EU’s Lawmakers Take Ax To Green Agenda

  • Date: 18/04/13
  • Ben Winkley, The Wall Street Journal

The future of Europe’s environmental agenda is in serious doubt after lawmakers rejected a proposal that would make carbon emissions more expensive.

Europe’s Emissions Trading System, launched in 2008, was based on the principle that polluters pay to cover their emissions, and that by raising the cost of polluting, it would encourage businesses to invest in cleaner technologies.

Slack demand for electricity because of the recession, and an abundance of permits because of an initial overgenerous giveaway helped push the price of emitting a ton of carbon below €5 ($6.60) earlier this year from nearly €30  in 2008.

After European lawmakers voted not to postpone issuing new permits for between five and seven years, the price halved again. The Economist describes the market as “below the level of junk bonds.”

For the green agenda, this appears to be a crushing blow—a push for job generation and stronger economic growth has triumphed over a bid to tackle climate change.

Last week the environment ministers of some of Europe’s largest member states called on members of the European Parliament to support a strengthening of the trading system, warning that “eight years of climate action will be lost.”

Reuters says that while the EU’s carbon market is far from dead, the bloc needs to combine proposals for an ambitious 2030 emissions cap with reform of its carbon market for a coherent climate policy which looks beyond the current fiscal crisis.

But the IEA says progress toward clean energy has stalled, and warned of a need for a rapid expansion in low-carbon technologies. “We cannot afford another 20 years of listlessness,” it says.

There are appears, however, to be a titanic gulf between what we say ought to be done about climate change and what we are doing, says grist.org’s David Roberts.

The Financial Times last month said a tax that strengthens energy security and cuts pollution while minimizing the damage to employment and investment was “one of the least regrettable” of all taxes, and said the idea deserves much wider enthusiasm.

It was referring to the possibility of the U.S. implementing something similar to Europe’s carbon trading system—what chance now of adoption there?

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