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EU Might Halt Carbon Market to Sort Out Economic Crisis, Labre Says

There’s a risk the European Union might halt its carbon market, the world’s biggest, while it sorts out the bloc’s economic and political problems, said Marcelo Labre, a visiting fellow at London Business School who teaches energy, carbon finance and emissions trading.

“The main issue is a possible runaway effect to other periphery countries that could lead to the breakup of the euro zone as we know it now, leading to the emissions-trading-system halt until EU governments manage to sort out their more urgent economic problems,” Labre said today by e-mail. “The probability of this event is no longer negligible.”

Taking Greece out of the carbon market would marginally reduce the program’s surplus because the nation’s emissions have dropped so much, Labre said. “Greece itself is immaterial for the carbon market.”

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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