COMPANIES SELL PERMITS FOR FOUR TIMES ORIGINAL PRICE

An investigation is underway into the European emissions trading

scheme that has allocated hundreds of carbon permits to multinational

companies.

The permits - intended to account for thousands of tonnes of CO2

produced over five year periods - can be sold for cash and have been

allocated to heavy polluting firms including steel and cement making.

Companies were offered four times the value of the original permits

price when first allocated, environmentalists told Daily Planet Media

with further claims that the allocation of permits were influenced by

lobby groups.

Car manufacturing giant Ford is one of many companies that have

purchased permits with the option for selling. Toyota was reported to

be those companies undecided on what to do with their surplus credits.

Surplus amounts are calculated using figures published by the European

Commission on corporate CO2 emissions for 2007.

But not all are surpluses allocations as some companies have been

allocated fewer permits than they require. An under allocation to the

UK electricity sector has meant emissions overall were reduced by only

60 million tonnes a year - much lower than expected.

Meanwhile a campaign has been begun in Britain to pressure companies

to surrender surplus credits thereby raising the price of permits and

providing a money incentive for more companies to invest in clean

technology.

The State of the Planet

CARBON CONFUSION

posted to ClimateConcern by Eve

PS How can we have a market unless credits are both bought and sold? If companies who use less than their allocation are not rewarded financially then the incentive for planned emission reduction is removed. It is probably worth while for companies to hold their credits in case they later cannot meet the targets imposed upon them within the timescale.

A request to surrender credits in any significant quantity is in my view counter productive. Perhaps percentage taxation of the surplus would be tolerated.

Malcolm