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(updated 26th
May 2004)
By Adam Smith / London
European firms have long enjoyed peddling their wares freely around the
E.U.'s single market. Starting next year, there will be a new
commodity for sale: greenhouse gas emission, a.k.a. carbon credit. Although it's the first
large-scale system of its kind, the principle is simple; a company or
plant is assigned a carbon dioxide emission limit, typically based on
the host historical emissions characteristic. If a firm lowers its allocation limit
- by using renewable energy switching from one fuel to another or
through geological carbon sequestration - it can sell its
remaining allowance to another company that's set to breach its quota.
The Brussels scheme envisions 12,000 industrial sites trading emission
allowances helping slash 1990 emission levels by 8% before 2012.
Cuts to the E.U.'s
greenhouse gas levels are overdue. Levels in the original 15 countries are
expected to overshoot the mark by 7.5% in 2010. Still, no one seems to be
feeling the heat just yet.
Fourteen of the E.U.'s 25 members have
yet to submit final plan for the trading scheme, despite this year's May 1
dateline. "The news is bad," say Rob Bradley, energy specialist at the
environmental group Climate Action Network Europe. Some governments , he
says have "handed out allocations like it's Christmas" But many experts
remain optimistic. "It's important to have challenging targets, yet still
promote flexibility and start off gradually, " says Stephen Bygrave, analyst
at the OECD. When the trading system does get going next year, the E.U. may
well have found a novel way to make environmental care profitable.
Armstrong EcoNews
Editorial |
