ETS and Carbon market set for final collapse as Germans lower the bar

The BBC ( Newsnight and online) report that the the German government is about to trigger a new crisis in Europe's flagship climate policy, the Emissions Trading Scheme (ETS).

BBC News ( in disturbed and amazed tones) understands the German cabinet is likely to agree a deal that will reduce carbon emissions from industry by only 0.6% between 2004 and 2012.

"I have been a big supporter of the EU ETS, but hearing the German news I feel more depressed than I ever have done about our ability to tackle climate change," said a visibly depressed and upset Professor Michael Grubb of the UK Carbon Trust, set up by the British government ( as a hopeless gesture) to help create a low-carbon economy.... and distribute tax payers money amongst the needy academics who live by pursuingthis CO2 / GG nonsense, keeping the HMG Fear factory churning away.

Gloomy Grubb went on to say , "The German position is ridiculous - their emissions had been coming down over a long period of time. Last year's figures are definitely not a blip and this agreement is certainly nothing to do with protecting the climate." (Could this be the welcome end of the Carbon Trust ?)

The news may comfort the US (and other) climate sceptics who predicted that Europe would talk big on climate change but fail to impose large carbon cuts on its own industries.It also confirms the views of those (like Lord Patel) that the whole ETS and carbon trading was a massive financial scam ... sedulously supported by the gormless Margaret Beckett.

At least the Germans will be announcing their EU ETS plans on deadline on Friday. Most other EU nations do not have their plans ready.

The UK government is waiting on the German decision because in the last phase of the EU ETS, British firms complained that the Germans had been given too many carbon permits, conferring a competitive advantage.

The Swedish government has agreed a lax cap on CO2 and is expected to stick to that unless Germany and the UK impose much stricter caps. This now looks most unlikely, and will badly undercut the EU's position in international negotiations on climate.

The European Environment Agency has released figures showing that the EU is badly under-achieving on its Kyoto targets. EU emissions rose by 0.4% in 2004 relative to the previous year. UK emissions rose 0.2 %. In 2004, the combined EU-15 emissions were only 0.9% below 1990.

Emissions of climate-changing greenhouse gases (GHG) from the EU-25 increased by 18 million tonnes (0.4 %) between 2003 and 2004. Emissions from the EU-15 increased by 11.5 million tonnes (0.3 %) in the same period. These figures, released today, are contained in the latest GHG inventory report from the European Environment Agency (EEA), based in Copenhagen.

Spain and Italy saw the largest emission increases in absolute terms with plus 19.7 (4.8 %) and 5.1 (0.9 %) million tonnes respectively. On the positive side, 2004 saw emissions reductions from Germany (- 9.1 million tonnes, - 0.9 %), Denmark (- 6 million tonnes, -8.1 %) and Finland (- 4.2 million tonnes, - 4.9 %).

The following figures and table give details, for the EU-15, of trends in emissions of the six greenhouse gases up to 2004. Emissions from international aviation and shipping, and emissions from/removals by land use change and forestry, are not covered.

(C) EEA (left click to enlarge)

BREAKING NEWS

The German government approved a plan today by the cabinet that covers ETS policy covers policy between 2008 to 2012.

It allows industry and electricity companies to emit 482 Mn. tons of carbon dioxide (CO2) per year, marking an increase over last year's level of 474 Mn. tons, which the government said unfairly penalized German manufacturing industry.

The increased allocation is worth more than EUR 7 Bn. on the basis of a current market price of about EUR 15 / ton of CO2 under the EU's Emissions Trading Scheme (ETS).