The European Union should return withheld carbon allowances near the end of the decade to make its plan to resuscitate prices more effective, according to the International Emissions Trading Association.
The bloc is seeking to curb supply starting next year to ease a supply glut. Returning all allowances in a single year would risk a “price crash,” the Geneva lobby group said today in an e-mailed statement.
The EU should remove a higher portion of allowances in 2013 rather than in subsequent years, IETA said. That year “is for several reasons better supplied than subsequent years and this would also send a stronger signal of political determination,” the lobby said.
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