The American Interest
Analysis by Walter Russell Mead & Staff
EU Refuses to Resuscitate Its Dying Carbon Market

The European Parliament just voted down a measure that would have attempted to revive its carbon market, likely dooming it to a slow and undignified death. This was a last-ditch effort to drive the EU’s carbon price back to a level that would incentivize green reforms. And it failed.

The EU’s carbon market was the flagship program of its recent green efforts. Ideally, it would have given companies a reason to emit less carbon. Companies that emitted less than allowed could have sold off remaining carbon credits to firms that emitted more. But the authorities gave out too many credits, and as Europe’s economy faltered the price for those credits plummeted. The vote today was meant to save the program by addressing this over-allocation, creating an artificial shortage that would drive permit prices back up, but in a time of financial crisis, the European Parliament chose industry over green ideology. The WSJ reports:

“It was a vote of reason,” said Poland’s environment minister, Marcin Korolec. Poland, one of the EU’s less-affluent members, has been outspoken in its opposition to the measure, which it said could hamper development. [...]

After the vote, the price [of carbon credits] dropped to €2.55 before recovering partially to €3.2…down from nearly €30 in 2008.

Without the backloading plan to increase scarcity on the emissions permit market, “the ETS will almost certainly collapse,” said Kash Burchett, a London-based analyst at consulting company IHS Energy.

The EU has been the global laboratory testing the green agenda to see how it works. Today’s story means that the guinea pig died; the most important piece of green intervention in world history has become an expensive and embarrassing flop.  It’s hard to exaggerate the importance of this for environmentalists everywhere; if the EU can’t make the green agenda work, it’s unlikely that anybody else will give it a try.

Published on April 16, 2013 12:30 pm
  • http://www.facebook.com/people/Atanu-Maulik/100000528219784 Atanu Maulik

    Great news ! This is one huge positive to come out of the entire Euro mess. EUrocrats have run out of money to squander on their GREEN gods.

  • Corlyss Drinkard

    “The European Parliament just voted down a measure that would have attempted to revive its carbon market, likely dooming it to a slow and undignified death.”
    Not so fast! Regrettably, rational people of good will tend to underestimate the greens’ capacity for thuggish and grotesque street-fighting skills. There’s no lengths to which they will not go to cling to their magical thinking about AGW, man-made climate change, CO2 as a poisonous gas, the irremediable dangers of fossil fuels, and the ability of renewable energy forms to sustain modern industrial life.

    • http://www.facebook.com/people/Atanu-Maulik/100000528219784 Atanu Maulik

      I think you are overestimating the ability of the greens. I believe they are reaching the end of the road and even they know this. That’s why their commentary reeks of despair these days.

      • Corlyss Drinkard

        I pray you’re right. Unfortunately, they have control of policy apparatus in a number of European countries and the US. They don’t care about facts. If they can use policy create their vision of massively expensive fossil fuels as a way to degrade American superiority and boost those nations and minorities that they consider more deserving, they’ll do it. E.g., I certainly don’t expect His Nibs to approve the XL pipeline as long as he wants to crush Republicans in the 2014 election. I don’t expect him to support by any means the necessary build out of the infrastructure to make nat gas as available as gasoline. You can witness already Germany’s wholesale refusal to frack and their premature, wholly emotional jettisoning of nuclear energy. Ideological stupidity reigns, Atanu.

  • RayG

    Unfortunately, the Greens are so thoroughly integrated into California’s various levels of government that there is little hope of ending the green insanity in my home state.