P.S. Price of carbon also hit by recession
It’s not hit the headlines yet, but the recession is also driving down the market price of carbon. It’s fallen by 25% in the past month to 18 euros a tonne of CO2, drifting down towards values that cannot hope to drive the introduction of alternative low carbon industrial technologies. Nor tackle the projected rise in emissions from transport – road, aviation and shipping.
One reason for the near-collapse in CO2 prices is that emissions caps were set in a period of sustained growth. The carbon market establishes the principle of CO2 as a tradeable commodity. Now there’s a surplus as firms cut back. A mild winter would make matters worse – cutting household energy bills (good) but also reducing reliance on baseload power from coal.
What does this mean for policy? Should Government’s index link the cap to the state of the economy? Set a floor price for CO2 – high enough to always be pushing industry and transport to factor the realities of the global warming in their day to day decisions, and long-term investments?
Is this yet another market failure? If so, the alternatives have to be looked at again – perhaps a carbon tax, set at a rate that will achieve that shift to a low carbon economy and really deliver the green and decent jobs routemap out of this recession.
P.S global greenhouse gas emissions, if unabated, will rise from 44 billion tonnes of carbon dioxide equivalent in 2005 to 60 billion tonnes by 2030, the International Energy Agency said this week.
So, What if you could take action now sitting in front of your computer armed with nothing more than your credit card and an e-mail account?