European Trading Scheme ends Terminal Phase II

The second stage (Phase II) in the fairy tale of the European Trading Scheme has kicked off with the European Commission first 10 national plans for allocating CO2 emission allowances to energy-intensive industrial plants being published. Accounting for 45% of emitted carbon they show a planned reduction of almost 7 per cent below the emissions proposed by the national allocation plans (NAP's) and 7 per cent below the 2005 emissions. Plans so far cover Germany, Greece, Ireland, Latvia, Lithuania, Luxembourg, Malta, Slovakia, Sweden and the United Kingdom.

The figures published show that of the ten nations who have agreed Phase II levels all failed to exceed their 1 st Period cap - i.e they produced less carbon than they planned to. This is either a triumph of engineering or a failure to establish meaningful targets.

The result was that the ETS trading scheme was a failure and far from changing hands in excess of the penalty of 40 Euros a ton, a ton of carbon trades at nearly 8 Euros.

Environment Secretary David Miliband , lying through his pearl white teeth today said ;

"Today's decision by the European Commission represents good news for the environment and good news for Europe. Emissions trading is a key tool in the UK and across the EU to reduce carbon emissions and tackle climate change. The EU has a responsibility to ensure scarcity in the carbon market and a sustainable price of carbon. Today's decision shows a clear determination to achieve this. "

The ETS scheme is a total and abject failure - it will wither away politeley and eventually an energy tax will be applied as was proposed a decade ago.

As all the UK legislators, elected or selected, failed to understand the market, or the mechanisms that drive it, failed to criticise the scheme it was allowed to go ahead - so they will lamely let it slide away... blaming it of course on India, China, the US who never wanted part of it anyway.

The loser - the UK industrial, commercial and domestic consumers of electricity who have seen price rises of up to 45% in the last year for electricity ... and control over the industry pass to companies based outside the UK.

PS Since the announcement, the ETS market has collapsed further.Close 29 November 2006
EUA DEC 2006 €8.10 -0.50