Europe expands emissions trading directive, prices set to rise

The European Parliament agreed April 20 to the directive expanding the scope of the new emissions trading scheme within the EU from January 1, 2005. 

EUpolitix.com reported, A full sitting of MEPs has backed a report on emissions trading which would mean heavily industrialized EU countries could pay the developing world to pass on its CO₂ quotas, dictated by the Kyoto Protocol on climate change.  And, according to amendments made by parliament, the scheme would be compulsory even if the international Kyoto agreement never enters into force.

 Alexander de Roothe Dutch MEP responsible for the proposal in parliamentargues that such a move is necessary for industry to learn how to fight climate change, even without the Russian ratification necessary to make Kyoto legally binding.

 De Roo also commented on a notable omission, Emissions rights from nuclear activities are explicitly excluded.  This legislation is ever greener than the Kyoto Protocol.

 EU Environment Commissioner Margot Wallstrom argued that the directive would be good for business:  The linking of the Kyoto mechanisms to our emissions trading scheme… will reduce costs for the companies participating in emissions trading and provide investors in green technology with the certainty they need.

 In related news, Irish electricity prices are expected to rise by 6 percent initially as a result of the new trading scheme.  According to Ireland.com (Apr. 17), the Irish electricity supply company ESB, has warned of significant rises in electricity prices because of new requirements on carbon dioxide emissions.  The company has claimed that its quota allocation under the proposed CO₂ emissions trading system for Ireland will cause its power generation costs to rise by up to 40 percent.

 This would in turn result in domestic prices rising by up to 20 percent if the increased costs of production are passed on in full.  Electricity industry sources have indicated a probable rise for consumers of six per cent in the coming years.