In a report which analyses the EU's proposal for the 2008-2012 version of the ETS, WWF said that a heavy reliance on carbon credits bought from developing nations would mean that EU industry would have very little incentive to reduce emissions. Between 88 and 100 per cent of the nine highest polluting European countries' emissions restrictions could be met simply by buying credits from outside the EU.
'There is a real danger that this will lock the EU in to high carbon investments and soaring emissions for many years to come,' said Keith Allot, head of WWF's Climate Change Programme. 'If the ETS is to fulfil its potential, we must ensure it leads to real carbon emission reductions within Europe. Climate change is an urgent priority, and we can't afford to waste another five years before we get Europe's emissions on a downward path.'
The first incarnation of the Emissions Trading Scheme failed because the EU issued too many credits, saturating the infant carbon market and reducing the price per tonne of carbon to such a low level that trading became meaningless.
This article first appeared in the Ecologist June 2007
