02 February 2013

Friday night climate change and emissions trading reading

What do economists think is the best policy to adopt to respond to climate change? Hat-tip to the Environmental Economics blog.

The New York Times discusses energy taxes as tools to help tackle climate change. Hat tip again to the Environmental Economics blog.

The Davos World Economic Forum is not ignoring climate change. They have commissioned a report saying that curbing climate change will cost $700 billion a year.

Leo Hickman of the Guardian concludes you can't assume your flying emissions are 'offset' just because the EU has an ETS.

A UBS analyst concludes that the emission allowances (emission permits/units/credit) in the European Union emissions trading scheme are “worthless” without a change in the rules to tighten supply and curb the record glut of excess allowances.

According to UBS, the European Commission’s strategy for the glut is to reduce the supply of allowances into the market by postponing the sale of 900 million allowances from the 2013-2015 period to 2019-2020. This is being called "backloading".

However, "The European Commission, the bloc’s regulatory arm, will not get support from governments for its plan to temporarily cut oversupply by delaying auctions of some permits"

Consequently, the "EU nations and the region’s parliament have two options now: to “sit back and do nothing and see the market crash” or to support the short-term rescue plan to backload allowances".

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