A new failure for carbon trading - healthy or professional scepticism?

[Hans De Keulenaer]

A British think-tank, which is known for being Eurosceptic, predicts that the trading scheme (ETS) is heading for a new collapse and failure during the second phase, 2008-2012. The argument is that the seemingly tighter rules, with fewer permits, are severely softened by the possibility to trade Carbon Emission Allowances, CERs, by use of the flexible mechanisms.

WWF however think that it is the Euroscepticism that overtakes the judgement and points at that the phase 1 failure also led to learning and improvements. The EC claims that the prices for 2009 (in the area of 19€ per tonne) rather shows that the system works as designed and intended.

[david....@copperdev.co.uk]

On Aug 16, 7:04 pm, "Hans De Keulenaer" <hans.dekeulen...@gmail.com>
wrote:

> A British think-tank, which is known for being Eurosceptic, predicts that
> the trading scheme (ETS) is heading for a new

> collapse<http://www.openeurope.org.uk/research/etsp2.pdf>and failure

> during the second phase, 2008-2012. The argument is that the
> seemingly tighter rules, with fewer permits, are severely softened by the
> possibility to trade Carbon Emission Allowances, CERs, by use of the
> flexible mechanisms.
>

> WWF however <http://www.wwf.org.uk/news/n_0000004228.asp> think that it is

> the Euroscepticism that overtakes the judgement and points at that the phase
> 1 failure also led to learning and improvements. The EC claims that the
> prices for 2009 (in the area of 19€ per tonne) rather shows that the system
> works as designed and intended.

It seems that WWF has removed its response. In any event, how can a
future price prediction show that a scheme, yet to start, works as
intended? Phase 1 also had a predicted price (around 30 euro) but it
ended up at just transaction costs (less than 1 euro).