Emissions from the burning of fossil fuels are thought to be responsible for the elevated levels of atmospheric carbon dioxide that are thought to be driving global warming. The Kyoto Protocol has been considered an important first step in reducing emissions with European nations agreeing to cap emissions under a trading scheme.
Here’s how it was explained before the market was launched:
“The Kyoto Protocol established clear targets for reducing the greenhouse gases that are to blame for global warming, and flexible and market-based instruments with which to achieve these objectives.
An effective emissions trading system can be a key tool for dealing with climate change. From January 2005, the European Union hopes to have in place the world’s biggest and most effective emissions trading scheme, covering over 12,000 energy-producing and energy-intensive plants across the EU. The scheme will offer businesses a cost-effective way of both reducing their emissions and covering the bill for action to help prevent climate change.
How does emissions trading work? Basically, each Member State agrees a national allocation plan (NAP) setting out the total amount of CO2 its operators can produce. Each plan should be based on a national commitment to reduce emissions in line with the Kyoto agreement. Companies then have the right to trade their allowances either directly with each other or via a broker, bank or other intermediary. Over time, emissions trading exchanges are expected to develop.
… Of course, the scheme’s effectiveness in cutting greenhouse gas emissions depends on the level of trust participants place in it. “
It seems the British were one of the few honest nations, at least they are not now being accused of underestimating their emissions.
The price of carbon was in free fall some weeks ago when it became apparent that many European nations had overestimated their emissions. At least an initial overestimation, rather than a big saving, is the reason now claimed for the surplus of carbon credits which has resulted in a halving of the price of carbon on the new market in just over two weeks, click here for my previous blog post.
Today was the day the European Union was expected to announce the overall difference between emissions and “emissions” and according to Reuters:
“EU emissions of heat-trapping carbon dioxide in 2005 were 44 million tonnes below a quota of 1.829 billion tonnes under the European Union’s carbon trading scheme …
The figures confirmed a Reuters report on Friday that most EU members undershot their limits for greenhouse gas emissions, suggesting the bloc had been far too generous in handing out permits to pollute.
Top polluter Germany moved swiftly to say it would make retroactive cuts to its 2005 allocation of allowances to emit carbon dioxide after European Union figures showed a 21 million tonne — or four percent — German undershoot.”
British companies say they will sue.
According to The Guardian:
“While CO2 emissions in Germany, the EU’s biggest polluter, fell 25.5m tonnes short of levels allowed under the ETS, Britain’s were 31.3m tonnes above its allowances in 2005, the first full year of its operation. Overall EU emissions were 59.2m tonnes short.
[And I thought someone might consider this good news.]
The five UK companies suing the commission at Europe’s second highest court, the court of first instance (CFI), the Guardian has learned, are RWE npower, Scottish Power, Scottish & Southern Energy, International Power and Drax, owner and operator of Europe’s biggest coal-fired plant in north Yorkshire. They are demanding the reinstatement of 20m tonnes of extra emissions rejected by Brussels. Their action, which has come after the government dropped its own legal proceedings against the commission, is expected to be followed later this year by renewed court action between Britain and Brussels because Whitehall is refusing to meet the June 30 deadline imposed by the ETS for submitting its national allocation plan (NAP) for CO2 permits for the period 2008-2012 and has offered the end of the year instead.
… It is understood that the five want the court to uphold the principle of “the accurate baseline” – or allowing governments that submit provisional estimates of emissions to revise these in the light of fresh evidence. Their group also argues that the commission’s reasons for rejecting the UK’s amended NAP had already been rejected by the court.”
So it seems the success of an artificial trading system is dependent on everyone being more British?
Jennifer Marohasy BSc PhD has worked in industry and government. She is currently researching a novel technique for long-range weather forecasting funded by the B. Macfie Family Foundation.