Carbon credits are created by emissions controls and by other manufacturing practices and they can be sold to other facilities to offset emissions that cannot be economically reduced. These are attractive when a facility cannot meet a new regulation, and is near the end of its useful life, making it uneconomic to install expensive new emissions controls. Carbon credits can also be held or eliminated to reduce available credits. This results in a loss of potential value to those who created them, but is good for the environment since this reduces total carbon emissions. The EU is proposing to temporarily curb an oversupply in carbon credits.
Secretary-General Ban Ki-moon welcomed the move by the European Parliament to support the proposal to backload permits from the European Union’s carbon market.
“The vote sends a clear signal that the European Union remains committed to carbon pricing,” the Secretary-General’s spokesperson said in a statement.
On 3 July, EU politicians in Strasbourg voted 344-311 in favor of temporarily removing a maximum of 900 million permits, out a total surplus of around 1.7 billion, from trade. The move is meant to drive up carbon prices which have been at a record low.
According to today’s statement, Mr. Ban’s spokesperson said the UN chief hopes more structural reforms will now follow in order to strengthen the EU’s carbon market “as a driver for innovation and energy efficient solutions.”
The Secretary-General added that the EU’s carbon market is an inspiration to the development of similar markets in China, Australia, South Korea and the United States.
“Europe must continue its fight against climate change,” Mr. Ban said. “An effective and well-functioning carbon market is a key tool to reduce greenhouse gas emissions cost-effectively.”
Read more at UN News Center.
Article by Roger Greenway, appearing courtesy Environmental News Network.