From the AFR:
Lawmakers at the European Parliament have approved a rescue plan for the European Union’s system for trading carbon-emission credits. Their hope is to revive prices for carbon credits, which have been so low that the system is creating few incentives for smokestack industries to cut back on their emissions of greenhouse gases.
Although many experts see the plan as little more than a stopgap action, “today was extremely important to get the first emergency measures started,” said Marcus Ferdinand, an analyst at Thomson Reuters Point Carbon, a market research firm in Oslo.
“This shows the European Union cares about its emissions trading scheme.”
The approval by the Parliament had been widely expected, and the carbon-credits market reacted only modestly. The price of a carbon allowance ticked up about €10¢, to €4.90, before settling back to about €4.80.
…The plan the Parliament approved Tuesday would delay the allocation of one-third of the new permits that had been scheduled to be offered in the next three years, as a way to make them scarcer and presumably drive up their price, creating more of a cost incentive for polluters to reduce emissions or move toward clean-energy technologies.
As part of the system already in place, the ceiling on allowable emissions is to be reduced by nearly 2 per cent each year, to give companies even more incentive to adopt clean-energy alternatives.
