EU May Withold Carbon Permits to Increase Prices
European Union politicians supported a proposal last week to withhold carbon permits from the emissions trading scheme to increase prices. EU parliament's industry committee passed a proposal that would let the Commission take measures that "may include withholding of the necessary amount of allowances" from the 2013-2020 market. Analysts have said that the Commission overestimated the number of required permits for the 2008-2012 period, resulting in a price-depressing surplus of 500 million to 1.4 billion permits. In order to make the proposal law, the Commission would have to formally propose to withhold permits, and the Commission appears split on whether to impose this measure. While climate commissioner Connie Hedegaard is in favor, industry department head Antonio Tajani has cautioned against intervening in the scheme. "The pricing of allowances should be left to the market. Prices would recover by themselves as soon as the economy were to pick up," he said before the vote. The new proposal revises a vote from December that called for a withdrawal of 1.4 billion permits. The new proposal would involve withholding the "necessary" amount of permits. For the full story, see http://www.guardian.co.uk/environment/2012/feb/29/eu-withhold-co2-permits.