EU outlines new carbon permits
29/11/2006 BBC EU outlines new carbon permits. Many countries are still seeing their carbon emissions rising. The European Union has established carbon limits for the second phase of the carbon trading scheme, a key step in cutting greenhouse gas emissions. The European Trading Scheme (ETS) aims to cut emissions by 8% of 1990 levels. Critics say that the nations involved in the scheme had set their carbon allowance levels too high, and were not aggressive enough in cuts. The EU set allowances for the 2008-2012 period to an average of 7% below the level proposed by member states. By creating a market for carbon, firms are meant to have a financial motive to cut emissions. The plans concern the UK, Ireland, Germany, Greece, Latvia, Lithuania, Luxembourg, Malta, Slovakia and Sweden. The scheme is the largest of its kind and was developed by the EU as a way to meet targets under the Kyoto protocol. The protocol was aimed at tackling global warming by setting limits on greenhouse emissions – but was never ratified by two major players, the US and Australia. International market Heavy polluters, notably power firms, are obliged to own the right for each metric ton of carbon dioxide they produce. Depending on their needs, they can buy or sell permits. Trading carbon is meant to enable firms to cut emissions at the lowest price. Carbon prices plummeted in May after it was revealed that governments had doled out too many permits, creating a surplus. Other trading schemes have looked to Europe’s carbon trading scheme, which is
worth some 7.2bn euros ($9.4; £4.8bn), as a template. “It has to be and will be the nucleus of an international carbon market,” said Peter Zapfel, the EU coordinator of the scheme. Even though the US and Australia failed to ratify Kyoto, they have both developed voluntary trading initiatives. While the ETS currently covers large polluters – such as power firms and oil refineries – in time it is set to include missions from planes among others. Allocations will be set on Wednesday and they cannot be changed. “Governments cannot go back and say we want to give more or fewer allowances,” said Mr Zapfel.