16 May 2006, Financial Times

Carbon Credit Errors Throw Permit Scheme into Turmoil

Fiona Harvey, Hugh Williamson, and Raphael Minder reporting in the Financial Times on Europe's System for trading pollution permits.

"Europe's system for trading pollution permits - hailed as the global model for cutting greenhouse gas emissions - was thrown into turmoil last night after at least two member states proposed substantial and conflicting changes to the way it operates."

"Figures released yesterday by the European Commission showed that most member states had given their industries far too many carbon credits, and risked undermining the drive to cut emissions"

"But with an excess of 44m tonnes in carbon allowances last year, Brussels is now under severe pressure to ensure the scheme works more effectively in its next phase from 2008 to 2012"

"Yesterday Brussels said any adjustment to the current allocation of permits was not allowed under the scheme"

"France, where industries received about 12 per cent more permits than they needed, added to yesterday's confusion by proposing that companies should be allowed to roll over permits unused from the first phase of the scheme (2005-07)"

James Cameron Vice-Chairman of Climate Change Capital said that any such move would be "unwise"

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