(Europe) Carbon price won't push power sector away from coal - Reuters

[Eugene]

Source: Reuters

Carbon price won't push power sector away from coal
Wed Jun 27, 2007 10:37AM EDT

By Barbara Lewis and Daniel Fineren - Analysis

LONDON (Reuters) - Europe's main weapon against climate change,
which makes industry buy rights to emit carbon dioxide, has not
stopped power generators from using dirty coal because they can
still make plenty of money from burning it.

The European Union launched a carbon market to try to make low-
carbon sources of energy like gas, wind, biomass and nuclear
more competitive against high carbon coal.

The problem is that soaring oil prices have dragged up gas prices
in much of Europe too, making coal cheap by comparison and
overwhelming the penalty that a carbon price imposes on burning
coal.

"Energy price rises have driven more investment into coal and
coal to liquids than into renewables, and have swamped carbon
prices," said Nick Mabey, chief executive of the environmental
and sustainable development group E3G.

-snip-

Read more: http://www.reuters.com/article/environmentNews/idUSL2789197420070627

[jpak]

1. IIRC they did not auction those credits

and it was a big mistake...

[Dogmudgeon]

2. Carbon Credit trading will turn into a speculative market -- and crash

It is poised to become the next Tulip craze.

It is, in essence, a derivatives scam. If it was properly conceived and strictly enforced, it might be beneficial, but as it is, it commoditizes a source of environmental and social destruction.

The more damage there is to the environment, the more expensive Carbon Credits will be. It will incentivize greenhouse gas emission; it will put a premium on coal burning, especially lignite and bituminous coals.

It is the ultimate Junk Bond.

If the emerging juggernaut is not stopped, we will all pay the price, and just at the point where we will need every penny.

--p!