European lawmakers in Strasbourg have backed a plan intended to rescue the EU’s faltering carbon dioxide emissions trading scheme. A delay in the auction of allowances is intended to drive up the price of pollution.
The European Parliament on Wednesday voted for a temporary suspension of the auction of 900 million emissions allowances, a move aimed at boosting their slumping value.
Delegates in Strasbourg voted by 344 to 311 to back the delay, with carbon allowance prices having dropped to below 5 euros ($6.5).
The system, introduced in 2005, was designed so that power companies and large industrial concerns could trade carbon permits. It was intended to be an incentive for businesses to cut emissions and help stem climate change.
However, Europe’s financial downturn led to a drop in production and energy generation, which meant there was an oversupply of allowances on the market. The subsequent price drop made the idea of cutting emissions for profit increasingly unattractive.
“We must have a well-functioning European carbon market to boost innovative low-carbon technologies in Europe,” Climate Commissioner Connie Hedegaard said in a statement after the vote.
Praise and criticism
German Social Democrat member of the European parliament, Matthias Groote, said he was satisfied with the result. “The European Parliament has saved the emissions trading system from collapse,” he said.
The decision was also praised by the World Wide Fund for Nature (WWF), who nevertheless added that more could be done. “The European Parliament has done the minimum to rescue the Emissions Trading System from redundancy,” Sam van den Plas, climate change policy officer for the World Wildlife Fund, said. “Member states should back further measures to eliminate these toxic tonnes permanently from the EU’s carbon market.”
However the Federation of German Industry (BDI) said that parliament’s decision “sent the wrong signal.”
“Instead of strengthening the European growth motor of industry, the approach of the EU is unsettling and irritating industry across Europe,” the BDI said.
rc/msh (dpa, AFP)