"The European Commission is planning to propose an EU-wide carbon tax the first half of 2011"! This is a brave initiative which makes a lot of sense. Carbon taxes are easier to implement and monitor, and the only obstacle has been the bias against taxes in general and in favor of cap-and-trade, as if cap-and-trade is not eventually a carbon tax!
Finally, many industry experts and policy-makers are admitting that cap-and-trade has serious issues. The most recent confirmation comes from an analysis carried out by Resources for the Future (RFF), an environmental think tank; the findings of their analysis are documented in the report "Banking on Allowances: EPA's mixed record in managing emissions market transitions" which was published a few weeks ago. Key conclusions include:
So, my hope is that Europe follows through and adopts the carbon tax option. Others may follow.
Finally, many industry experts and policy-makers are admitting that cap-and-trade has serious issues. The most recent confirmation comes from an analysis carried out by Resources for the Future (RFF), an environmental think tank; the findings of their analysis are documented in the report "Banking on Allowances: EPA's mixed record in managing emissions market transitions" which was published a few weeks ago. Key conclusions include:
- Regulatory changes (e.g., administrative rules, court decisions and new emission rules) have wiped out $3 billion in the value of utility-held emission allowances.
- Cap-and-trade programs have suffered from declining credibility and market support.
So, my hope is that Europe follows through and adopts the carbon tax option. Others may follow.
