Obama’s Carbon ‘Cavalry’ May Help Revive EU Market, CEPS Says
President Barack Obama’s drive to protect the climate in his second term may help boost Europe’s flagging carbon market, according to the Centre for European Policy Studies.
“Those that sell the emissions trading market short should think twice,” said Andrei Marcu, a Brussels-based adviser at CEPS. “The cavalry may be on its way.”
European Union carbon permits, which trade in the world’s biggest greenhouse-gas market, surged 17 percent in the past two days as the bloc’s policy makers vote Feb. 19 on a plan to ease a supply glut that pushed prices to record lows last month. In the U.S., the Regional Greenhouse Gas Initiative proposed last week a 45 percent cut in its available permits.
“Obama’s comments may provide encouragement to those that want to make the emissions trading system better and create a different momentum ahead of the vote next week,” Marcu said yesterday in an e-mail.
Congress should pursue a “bipartisan, market-based solution to climate change,” Obama said in his Feb. 12 State of the Union address. “If Congress won’t act soon to protect future generations, I will.”
The European Parliament environment committee is voting on a proposal designed to allow the bloc to postpone the sale of 900 million tons of allowances until the end of the decade in a process known as backloading. The entire parliament votes later this year on the measure, which must also clear the Climate Change Committee of national governments.
EU carbon permits for December advanced 2.8 percent to 5.38 euros ($7.17) a metric ton today on the ICE Futures Europe exchange in London at 4:38 p.m.
Obama’s comments and the plan to tighten the so-called RGGI market in the U.S. northeast may embolden policy makers, Dirk Forrister, president of the International Emissions Trading Association in Geneva, said today by phone.
There was a “glimmer of hope” that U.S. coal-fired power stations may in future years be able to buy international emission credits to offset some of their carbon dioxide output, he said.
Obama said he will order his cabinet to identify new executive actions to combat climate change, including reducing emissions, helping the nation prepare for the worsening effects of global warming and speeding the transition to lower-polluting energy sources.
To contact the reporter on this story: Mathew Carr in London at firstname.lastname@example.org
To contact the editor responsible for this story: Lars Paulsson at email@example.com