12 Dec 2008 05:12:50
All carbon credits 'must be auctioned'
Reform to the EU's Emissions Trading Scheme is required ahead to achieve its goals, according to the House of Lords EU Committee.
In its latest report the committee calls for 100 per cent of allowances to be auctioned by 2013, instead of being handed out for free as was done in the first phase.
EU leaders meeting came to an outline agreement for the third phase at meetings held December 11th and 12th and it is thought heavy industries in some countries could receive free credits.
The report noted that some states with heavy reliance on coal fired power plants, such as Poland, opposed moves to auction all the credits, preferring to give them away.
As well as calling for all credits to be auctioned, the committee's report said that industries where 'carbon leakage' the relocation of emissions-intensive production to less regulated countries should be identified.
However, it said that before handing these industries free credits, decision makers should wait and see the results of the UN's Climate Change Conference in Poznan to have an idea of regulatory regimes around the world.
Meanwhile, carbon prices have fallen to 13 (£11.6) per emission per unit as the economic downturn restricts output and emissions, bringing down demand for emission permits.http://www.publications.parliament.uk/pa/ld200708/ldselec...