Giant Steps for Carbon Trading in Europe - by Mark Scott
It's not every day the European Commission (EC) is compared to a magician. Yet like a conjurer pulling a rabbit out of a hat, Brussels has created a multi-billion dollar industry almost out of thin air since the European Union Emission Trading Scheme (EU ETS) started charging companies for emitting carbon dioxide back in 2005. Europe's ongoing effort to combat climate change took a big step forward this Jan. 23 when the EC announced the third phase of the ETS, which extends the program to 2020 and sets more stringent reduction targets for the EU's energy and manufacturing sectors. For the first time industries such as aluminum and chemicals were added to the ETS, which will now cover almost half of Europe's total emissions. The goal is by 2020 to lower carbon output 20% from its 1990 level through a market-based mechanism that fixes the problems of earlier schemes and creates a more realistic price for carbon credits. One way Europe intends to do this is by requiring some companies, beginning in 2013, to purchase carbon emission rights via auction, rather than by receiving them as grants
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