Europepermits - Carbon Permits Said to Be in Excess in...

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- March 31, 2010 Carbon Permits Said to Be in Excess in Europe By JAMES KANTER BRUSSELS — As the global economy faltered last year and factories idled, industries in the European Union benefited from one of the most lucrative outcomes of the recession: a huge excess of permits to emit carbon dioxide. The scale of the surpluses should become clear Thursday, when the European Commission in Brussels is expected to issue preliminary figures for emissions from each factory and power plant covered by its Emissions Trading System in 2009. Those figures are likely to confirm that carbon trading, also known as cap-and-trade , is failing to put the kinds of financial pressures on major polluters that proponents promised when the system was formally initiated in 2005. The prospect of the shortfalls led on Wednesday to calls by international climate officials to consider stiffening European targets. Shortfalls could also strengthen calls in the United States and Australia — which have not yet introduced national systems to control emissions — to try alternatives to trading, like a straightforward carbon tax. The chief beneficiaries of the European system have been some of the Continent’s largest industrial companies, like the steel producer ArcelorMittal and the cement maker Lafarge,
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which received many of their permits for free from governments to help them meet the challenge of competition from parts of the world without such regulation. Many of these companies have booked millions of euros from the sale of their excess credits, anticipating that they would have plenty in years to come, or because they needed to generate cash to shore up their balance sheets as the economic crisis bit deeper. In many cases these companies have also held onto some of their surplus, which will make it easier for them to offset future emissions once the economy recovers. Defenders of the system say surpluses created by the economic collapse show that the system is working, by rewarding companies at times when they polluted less and by cutting them slack at a time of economic hardship. But critics say the system is in danger of losing sight of its original purpose and becoming
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Europepermits - Carbon Permits Said to Be in Excess in...

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