Problems with the EU ETS

Overview: What is carbon trading? (Daily Telegraph, 2011-01-30). The practice of carbon trading has been fraught with problems.
Emissions are not falling:

EU emissions trading scheme on course to make tiny savings, says report , The Guardian, 2010-09-10).
EU Emissions Trading System: failing at the third attempt (PDF, Corporate Europe Observatory, April 2011).
However, "The European Commission ... says that despite the dash for coal in Germany, the carbon trading scheme remains successful overall, with a fall in CO₂ emissions in 2009 of 11 per cent across the EU compared with 2008." (see Germany's coal own goal over carbon permits, New Scientist, 2011-02-24).

Germany's coal own goal over carbon permits (New Scientist, 2011-02-24). Perverse incentives have led to the building of new coal-fired power stations in Germany.
Updated: EU bans industrial gas carbon credits (Business Green, 2011-01-21).

Unfair competition and leakage: EU carbon trading windfalls under fire from Lord Turner (Daily Telegraph, 2010-03-03).
Import emissions:

Openness urged on UK's emissions (BBC News, 2010-09-03). "Robert Watson says that if emissions 'embedded' in imported goods are counted, UK emissions are up, not down. ... Prof Watson accepts that it will be hard to find a different metric than the current system."
The UK must own up to the full scale of its emissions problem (The Guardian, 2011-02-08).

The price of allowances is far too low. The overall effect of these problems, especially over-allocation of allowances and giving them away for nothing, is that the price of allowances is still much too low.

EU-ETS_briefing_april2011.pdf

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Gerry Wolff,

15 Apr 2011 15:58