November 21, 2006

Emissions trading not working?

Lord Lawson commented in his CPS lecture how green economic measures might well turn out to be perverse. Open Europe reports that -
The Environment committee have got the Environment Agency to fess up that the EU's Emissions Trading System isn't working. Responding to questions from the Committee this morning, the Environment Agency was unable to name any individual case in which a firm had reduced emissions as a result of the scheme, saying “it’s not clear whether we’re seeing any environmental benefits as yet”.

The Committee alluded to the fact that the ETS had cost businesses £500m so far, and then asked whether the ETS has had any tangible effect in reducing carbon emissions. Pressed further on this the people from the Agency said “we have not been aware of any significant impact”.

The Committee then went on to cite Open Europe’s research on the costs of complying with the ETS for the NHS. The Agency expressed concern over “the proportionality of allocations” and admitted that including smaller activities in ETS may not be appropriate: “There is a case for changing what’s in it…excluding smaller activities”, arguing that excluding such activities from the ETS would have a “negligible” effect on the levels of emissions. Asked whether they agreed that the allocation of carbon emissions has been "inherently irrational” the Agency said “we can only agree with that”.
Good gracious, a green impost that's not working. And the government's policy? Let's have more.

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