Emissions Trade in E.U. Is Sputtering - by Stanley Reed

President Barack Obama is trying to persuade the United States to adopt a cap-and-trade system to curb greenhouse gas emissions. But the European Union’s Emissions Trading System — the world’s flagship effort — is sputtering. European carbon permits, which traded at about €30 per ton a few years ago, are now hovering at about €5 per ton.

The Union set up the E.T.S. in 2005 to send a clear signal to electric utilities and other polluters that over time they needed to switch to cleaner energy sources and adopt innovative anti-pollution technology. But current prices, the equivalent of less than $7 a ton, are too low to encourage much of anything.

“The European Union’s energy and climate policy is in disarray and risks losing credibility,” said Kash Burchett, an analyst at IHS, an energy consulting firm in London.

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