Emissions trading failing to combat climate change
The EU's flagship Emissions Trading System is failing to deliver vital green investment, after a collapse in carbon prices magnified by the recession, MPs warn in a report out 8 February.
The UK parliament's Environmental Audit Committee is calling on the UK government to consider measures that would guarantee a minimum price for carbon, such as a new carbon tax.
The committee heard calls for a carbon price of EUR100 a tonne of CO2, or higher, in order to drive urgently needed investment in green technologies and energy efficiency. Current prices, which remain nearer to EUR15 a tonne, are too low to pull through the required investment.
Tim Yeo MP, Chair of the Environmental Audit Committee said: "Emissions trading should be helping us to combat climate change, but at the moment the price of carbon simply isn't high enough to make it work.
"The recession has left many big firms with more carbon allowances than they need and carbon prices have collapsed. If the Government wants to kick-start serious green investment, it must step in to stop the price of carbon flat-lining.
"Ministers should seriously explore the possibility of a carbon tax and must press the EU to tighten up the overall caps in the Emissions Trading System."
