Idiocy on carbon permits

Lordy be these people are dribbling fools:

But the future of the EU\’s emissions trading system (ETS) is also in doubt, according to leaked documents. If the EU meets its target of improving energy efficiency by 20% by 2020, then the price of carbon permits under its trading system is likely to fall dramatically. This will in turn make it less financially attractive for companies to invest in low-carbon technologies.

Under the EU system, energy-intensive companies are awarded a quota of carbon permits, each representing a tonne of CO2, and cleaner companies can sell their spares to big emitters. The current price of about €17 a tonne is regarded as too low to stimulate the investment in low-carbon technology envisaged under the system, however, and any further falls would remove even more of the incentive to clean up.

A low carbon permit price does not remove the incentive to reduce emissions.


It shows that we\’ve already reduced emissions.

If the permit price was €100 per tonne CO2-e, then sure, there would be huge incentives to reduce emissions. This would be because emissions were tough to reduce and thus we were still making high emissions. Thus the price to emit would be high.

A low price for permits means that we\’ve actually found it quite easy to reduce emissions. For we\’re not bumping up against the emissions limits, thus making such permits expensive.

Now no, not even I think that everything is hunky dory in this market. But the stupidity on display here is breath taking.

They are actually claiming that a low permit price is a problem. But we\’d like there to be a low permit price. We\’d like the permit price to be €0.01, lower if possible, 100 tonnes for that price. For that would show that no one needs to purchase the permits as we\’ve found it laughably easy to reduce emissions thus no one needs to purchase permits.

Low permit prices show the system\’s working, not low permit prices are a problem.

How did we end up being ruled by dunderheads?

4 thoughts on “Idiocy on carbon permits”

  1. > It shows that we’ve already reduced emissions.

    I understand what you are saying in principle (which is an interesting point, and not one I’d thought of, I plan to steal it for a future blog post). But in this instance I think you’re wrong: what it shows is that we gave out too many permits.

  2. Have to agree with William above on this one. The carbon markets have been implemented cack-handedly as a consequence of political pressure. It’s almost as though if you give politicians something to give away to create a market they give lots of it to their supporters.

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