Carbon Credit Policy Set to Tighten

By Daniel Stouffer

If we can see a silver lining of any kind in the cloud that represents the "great recession" it is that it will have accelerated a reduction in greenhouse gas emissions worldwide. This has been most noticeable in Europe, where trackable and tradable emissions have dropped significantly and ahead of predictions.

Many are hailing the fact that EU carbon emissions have fallen by 11% last year, creating the unusual result that the caps imposed by the Emissions Trading Scheme are now higher than the actual emissions. Many are wondering whether carbon credit policy will be relaxed, seeing as the results achieved are so far ahead of the game. Some argue that carbon credit policy should be relaxed in times of economic uncertainty, while others argue that this is completely missing the point and the overall objective here is environmental benefit.

If we can see a silver lining of any kind in the cloud that represents the "great recession" it is that it will have accelerated a reduction in greenhouse gas emissions worldwide. This has been most noticeable in Europe, where traceable and tradable emissions have dropped significantly and ahead of predictions.

Those who argue that carbon credit policy should be tightened now, so that even more environmental benefits are achieved, are worried that this could lead to calls for them to be loosened as a consequence of economic growth. However, environmentalists and scientists argue that the only way forward is to tighten caps and that loosening of carbon credit policy should never be considered under any circumstances.

Such a rapid decline in the European Union emissions was to be expected and was largely predicted, but it is certainly affecting the validity of the market. Furthermore, permits to produce emissions are now plentiful and this will put a brake on the rate at which companies in that continent pursue offsets internationally, slowing emissions cuts in overseas countries.

There is sure to be much debate about carbon credit policy in Europe and those who oppose the passage of stringent legislation in the US will certainly refer to the swollen market in the EU as they oppose the introduction of a mandatory carbon credit policy in the United States.

This is certainly an opportunity for business in general to recast itself in a "green" hue as it starts to from recession. New growth should always be seen as sustainable and carbon credit policy should not be relaxed at all as there is a danger that old habits could reemerge and it could become far more difficult to get back on track, to achieve the necessary reductions in the years ahead.

Due to some indications from the climate commission in the EU, it appears that the erstwhile 20% reduction target set for the year 2020 may well be increased to 30% and this would help to soak up the excess amount of permits that are floating around, which if not absorbed could be used to "pollute" as time goes forward.

Should the European Union increase its emissions reduction targets to 30% as it tightens carbon credit policy, it would come more in line with the recent declarations from within the United States, that greenhouse gas emissions should be reduced by 28% in this country in the same timeframe. It remains to be seen how this ambitious target will be realized domestically, however.


Article by Daniel Stouffer
Carbon Reduction Commitment (CRC) Energy Efficiency Scheme Introduction - The UK government is rolling out the Carbon Reduction Commitment legislation which forces over 5,000 organizations to take part in a "carbon cap and trade" scheme and to produce carbon emissions reports. Learn about Verisae's CRC Energy Efficiency support solutions at www.verisae.com/articles

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