The Green Party in the South West has welcomed news that the European Parliament has voted to tackle the oversupply of carbon emissions allowances to Europe’s most polluting industries.
The EU's Emissions Trading Scheme (ETS) is the largest in the world and aims to reduce CO2 emissions from industry by offering emissions permits to carbon intense industries such as power generators, steel and cement.
However, a huge oversupply of permits, owing to the economic downturn and because of lobbying by industry, has caused the price paid to emit a tonne of carbon to crash in recent years. The recent vote by the European Parliament will result in postponing the auctioning of 900 million allowances, a move which has immediately caused the price of pollution permits to rise.
Lead Green Party European candidate for the South West, Molly Scott Cato, who is also a green economist and contributed to the Stern Review on climate change said:
"Today’s vote gives us a chance to make the EU’s Emission Trading Scheme work properly. The carbon market has been far too weak and the price of carbon too low. Postponing the auctioning of these permits will allow the crisis-ridden ETS to begin doing it’s job of actually cutting carbon emissions and so tackle climate change. It’s a first step towards recognising that the market cannot solve the problem of climate change and that firm political action is required."
The proposal to postpone the auction of permits passed despite intense lobbying from some of Europe’s most polluting industries. Molly Scott Cato concluded:
"Let’s hope that this vote paves the way for the Commission to propose some deeper structural reforms to the ETS which enable us to cut our carbon emissions and create decent green jobs across Europe."
What is the European Union's Emissions Trading System (ETS)?
The ETS is designed to curb carbon emissions by big polluters in the EU, including sectors such as power generators, steel, cement and ceramics manufacturers.
How does it work?
The ETS is a "cap and trade system". Countries are given a national allocation of how much carbon dioxide they can emit, which is then divided up among the companies covered by the scheme. If companies emit more than they are allowed they must purchase permits to make up for the excess. If they emit less, they can sell their unused allocations.