Jan-2015
Recognising the on-going
failure of the ETS programme, the EU institutions are now debating yet another
sticking-plaster solution: the “Market Stability Reserve”, or MSR,
writes UKIP Energy Spokesman Roger Helmer MEP• The EU Emissions Trading System (ETS) was introduced in 2005 as a “Cap & Trade” scheme to reduce emissions. The theory was that the right to emit CO2 would be traded, and therefore permits would go where they were most economically useful. The price of the units would send a “signal” to the market, which would promote energy conservation and new low-carbon technologies.
It was anticipated that the price would start out around €25 a ton (a level at which very “dirty” fossil fuels like lignite would start to be squeezed out), and progress over the years to €75, which would virtually exclude all fossil fuels.
The ETS was hailed as “a market system” that would allocate a scarce resource – the right to emit CO2 — in an efficient way. In fact, for almost all of that time the price has languished below €10. It has failed to give the market signals intended. But it has created a huge administrative burden on industry, and spawned a new (and totally non-productive) business in “carbon trading”, in which many people have made a lot of money without benefiting the economy in any way.
