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Group: EU carbon permits should be cut
by Staff Writers
London (UPI) Jul 8, 2011

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Plunging prices for EU carbon allowances will go still lower unless their supply is tightened, a British environmental group said this week.

The Sandbag Climate Campaign blamed a crash in the market price of carbon permits under the EU Emissions Trading System last week on an oversupply of the credits.

Sandbag said the market is flooded too many credits. The group released a report Wednesday in London claiming 77 percent of installations covered by the ETS have a surplus of carbon permits and calling for 1.9 billion tons worth of permits being taken off the market.

Prices in the European Union's emissions trading system last week plunged to their lowest levels since a recession-led selloff in March 2009, which some analysts blamed on European infighting over climate change goals.

Futures for the EU carbon allowance fell as low as $16.75 early last week -- a 30 percent drop from levels in recent months. Prices have since rebounded a bit, closing at $18.40 per emissions allowance Wednesday.

"The recent freefall in the price of carbon has a simple, underlying cause -- a huge oversupply of permits," Damien Morris, senior policy adviser at Sandbag and principle author of the report, said in a statement.

"Our climate seat belt is so loose it's almost useless and Europe urgently needs to 'buckle up' and remove at least 1.7 billion permits if it is to get its flagship policy back on track."

The oversupply, Morris said, is equivalent to one full year's worth of emissions covered by the ETS. Permits carried over by heavy industry will "increasingly undermine Europe's flagship climate policy, threatening to derail it if left unaddressed."

The ETS "is potentially powerful but it may do more harm than good with a weak cap undermining other policies and national efforts," added Sandbag Climate Campaign Founder Bryony Worthington. "If Brussels fails to reform the ETS then it is setting up Europe to fail when it could so easily be leading the world."

The energy industry trade journal ICIS Heren blamed the price crash on EU's unveiling late last month of a new energy efficiency directive, predicting that supply of the credits would have to be cut to maintain prices.

Among its provisions is a demand that all EU member countries establish energy-saving plans and that energy suppliers reduce sales volumes by 1.5 percent annually through encouraging conservation among their consumers.

The directive also calls for governments to renovate at least 3 percent of their public buildings every year and for large companies to undergo audits identifying ways to reduce consumption.

The initiative imposes new energy efficiency legislation on the same sectors that are included in the emissions trading system, meaning potential buyers of the allowances probably won't need as many, the journal reported.

"Overlapping climate policies have robbed the emissions trading system of its ability to provide an investment signal for clean technology," ICIS Heren Editor Isabel Save said. "If new EU climate goals kill off demand, the supply of EU allowances will have to fall as well for prices to be sustained."

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Australia pollution tax wins crucial backing
Sydney (AFP) July 8, 2011 - Australia's controversial pollution tax looked all but certain to pass after a key lawmaker on Friday confirmed that he would support the package, which aims to reduce emissions blamed for climate change.

Prime Minister Julia Gillard is on Sunday due to unveil the full detail of her deeply contested carbon tax, which will see the country's top 500 polluters charged per tonne of carbon dioxide they emit into the atmosphere.

Gillard is staking her ailing political fortunes on the tax -- the most significant economic reform in Australia for decades -- scheduling a rare nationally televised address Sunday night to sell it to the public.

The Prime Minister is also planning a two-week "roadshow" across Australia to tout the scheme's benefits, and a taxpayer-funded advertising campaign.

She is expected to bring the legislation to a vote as early as August, when parliament resumes after a winter recess. The bill is not expected to hit any obstacles in the upper house, where the Greens hold the balance of power.

Australia is heavily reliant on coal-fired power and mining exports and has one of the highest per-capita levels of carbon emissions in the world.

Although the tax is deeply opposed by her conservative political rivals and a majority of the public, according to some polls, it looks set to become law after independent lawmaker Andrew Wilkie on Friday lent his support.

"I'm satisfied that my concerns have been addressed and I'm satisfied that the settings are right and that I will be supporting it," Wilkie told reporters.

"The government now, on my understanding, have the numbers."

Wilkie is among a handful of independent MPs who, along with the minority Greens party, put Gillard into power following last year's deadlocked elections. Their votes are also crucial in passing legislation.

The former intelligence analyst-turned-whistleblower on the Iraq War said Gillard had agreed to concessions for energy-intensive exporters and compensation for poorer households on rising energy costs.

"I understand that the Greens are now happy with the proposal, my colleagues Tony Windsor and Rob Oakeshott have also indicated they are happy in principle," said Wilkie.

"I think it's fair enough that the government needs to know that when it fronts up on Sunday that it's got the numbers, and it now has."

The starting price for the tax, which will give way to an emissions trading scheme within five years, will be Aus$23 ($24.80) a tonne according to reports.

Such a rate would be on a par with the European Union's emissions trading scheme but lower than that recommended by an expert inquiry.

Gillard also confirmed this week that the number of companies liable had been slashed from 1,000 to 500.

Her ruling Labor party's environmental credentials were badly dented by failing to act on pollution in their last term, resulting in a backlash so severe it destroyed her parliamentary majority.

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Japan's NTT DoCoMo plans green-energy cellphone towers
Tokyo (AFP) July 8, 2011
Japan's largest mobile phone operator, NTT DoCoMo, plans to start powering its cellphone tower network with renewable energy such as solar, wind or biomass, the company said Friday. The move could one day allow the company to feed excess electricity back into the grid, and would also act as a safeguard during power grid outages caused by natural disasters such as the March 11 quake and tsuna ... read more

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