Europe’s Emission Trading Scheme in Trouble

Europe’s flagship emissions trading scheme is suffering from a credibility crisis after it has emerged that many of the pollution limits have been far too lax. Critics argue that the limits need to be drastically improved or the scheme will do nothing to tackle climate change. They say governments have given industry “permission to pollute”.
As the results of the first phase of the scheme were announced yesterday, officials were accused of being “grossly overgenerous” in issuing polluting permits to 12,000 European power plants and industrial installations, responsible for more than half of the EU’s carbon dioxide emissions. The results showed that industrial sites in many member countries produced much less pollution last year than they were allocated which sent the fledgling market in carbon permits through the floor.

Only six countries – Britain, Ireland, Spain, Slovenia, Italy and Austria – issued permits that actually reduced rather than increased pollution. Germany emerged as the worst performer.

Friends of the Earth’s senior climate campaigner, Germana Canzi, argues: “Many governments gave away far too many pollution permits to their industries. They must now all urgently review their strategy for tackling climate change and ensure tougher targets are set on industry pollution for the next phase of the scheme.”

I, for one, have never liked the idea of pollution permits or emissions trading. They have a fundamental problem – they allow industry to carry on polluting. It is like fiddling whilst Rome burns.