Skip to comments.Permit glut sparks talk of ‘carbon central bank’ (in EU)
Posted on 05/02/2012 11:43:31 PM PDT by Olog-hai
Analysts say that any one-off EU clearing of the massive glut of carbon permits now clogging the Emissions Trading System (ETS) is likely to lead to a central bank' or other policy tool to manage future imbalances.
But the European Commission is cautious about entrenching such a mechanism in the ETS, which is the bloc's chief weapon to fight climate change.
Figures released today (2 May) show that 254 million carbon offsets worth around 2.6 billion were used in 2011, an 85% increase on 2010, despite statistics showing that the EU emissions continue to fall, due to recession.
Companies are thought to have been trying to maximize their use of offsetting allowances before the current trading current phase of carbon trading comes to an end in late 2012.
A carbon central bank is one of many measures that could come into force over the next few years, said Scott McGregor, chief executive of Camco, a developer of emissions reductions and clean technology projects.
There are a number of options that could provide the market with the long term certainty it needs and these should be considered before the best and most sustainable intervention can be identified that will ensure this market can continue to encourage emission reductions at least cost, he said.
But a source at the European Commission said the idea of a central bank for the carbon market is not on the table.
The problem with a carbon central bank is getting EU agreement for an institution that could intervene when the carbon price moves outside an agreed range of limits, according to Bas Eickhout, a Dutch Green member of the European Parliament.
(Excerpt) Read more at euractiv.com ...
Some people never learn.