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Carbon Permits – what are they really worth?

Power Station Carbon EmissionsDespite all the fresh annoucements about the Green Deal and the new Energy Bill, the UK is still struggling to meet its EU targets both for CO2 emissions and renewable energy generation.

This week there has been a lot of bad press over the carbon price – which has fallen to record lows, possibly highlighting that the trading of carbon permits is failing. Companies across Europe which emit CO2 can purchase permits if they exceed their required output levels but can also sell them if they have surplus. The buying and selling rate moves with demand but this week bidders didn’t even meet the reserve price of 5Euros per tonne.

This in itself is a worrying trend however my view of this paper trading of carbon is simply a money making exercise rather than one of controlling or reducing carbon emissions. In my humble view there should simply be a reduction cap which increases year on year (much the same as the renewable energy roadmap) so that companies invest in reducing their carbon emissions, rather than simply paying to increase them! Surely the money is better spent changing the wheels of industry which have lead us here but also to physically change the carbon dioxide levels.

Any kind of dramatic change takes time but the world has shifted in one century through an industrial revolution to create a world which relies heavily on the burning of fossil fuel. Much of the world’s economy is based around fuel and to initiate change in such a profitable sector will take time. However at the manufacturing or industrial end of the scale, ie where the output occurs, step changes could be made in relatively short periods of time to dramatically reduce CO2 output.

It may be a simplistic and shortsighted viewpoint  but is it possible that a paper trail which never ends and simply trades one way and the other in order to compensate for excessive emissions is the really the right way forward?

Industry is not just at fault, aviation, transportation and each individual homeowner holds much of the remaining responsibility. Although taxes are increasing in the aviation and transport sectors, there is currently no legislation or incentive for the majority of people to change the way they live, work and heat their homes. How would the carbon permit system work for the homeowner I wonder, would it even work at all?

Answers on 100% recycled postcard please!

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