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EU outlines new carbon permits | |
(about 23 hours later) | |
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 nations involved in the scheme had set their carbon allowance levels too high, and have not been aggressive enough in cuts. | |
The EU set allowances for the 2008-2012 period to an average of 7% below the levels proposed by member states. | |
"Today's decisions send a strong signal that Europe is fully committed to achieving the Kyoto target and making the ETS a success," said EU Environment Commissioner Stavros Dimas. | |
By creating a market for carbon, firms are meant to have a financial motive to cut emissions. | By creating a market for carbon, firms are meant to have a financial motive to cut emissions. |
Heavy polluters, notably power firms, are obliged to own the right for each metric ton of carbon dioxide they produce. | 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. | |
Helping hand | |
Even so, there are concerns that the plan will do little to ease problems. | |
Critics argue that the plans are unlikely to help improve pollution and the emission of greenhouse gases. | |
According to Tony Ward, Energy Director at Ernst & Young, the cuts imposed by the EU "will make little material difference to the reduction of Europe's carbon emissions against a backdrop of accelerating global emissions. | |
"The move is small and is unlikely to encourage the necessary substantive behavioural change," he said. | |
Günter Verheugen, the EU's Industry Commissioner, has warned that Europe's competitiveness could be affected if the targets are too strict. | |
The latest emissions plans concern the UK, Ireland, Germany, Greece, Latvia, Lithuania, Luxembourg, Malta, Slovakia and Sweden. | |
France has withdrawn its plan for carbon allowances and will submit a tougher outline in a number of weeks, a French environment ministry spokeswoman said. | |
Blueprint? | |
The ETS 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. | |
Other trading schemes have looked to Europe's carbon system, which is worth some 7.2bn euros ($9.4; £4.8bn), as a template. | |
Even though the US and Australia failed to ratify Kyoto, they have both developed voluntary trading initiatives. | 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 emissions from planes among others. | While the ETS currently covers large polluters - such as power firms and oil refineries - in time it is set to include emissions from planes among others. |
Allocations will be set on Wednesday and they cannot be changed. | Allocations will be set on Wednesday and they cannot be changed. |