It is probably the best thing that has happened for German electricity consumers for some time as German power prices fell by 3% as a reaction to the vote in the European Parliament. Even the EU Parliament – which has long been known as a “politically correct” follower of global warming orthodoxy – today balked at the prospect of “backloading” and postponing the introduction of 900 million “carbon allowances”. This had been proposed by the climate fanatics in an effort to increase the declining price of these allowances and the possible collapse of the entire carbon trading market.
It is to be hoped that it really is the “beginning of the “repatriation of EU climate policy” which has been so wrong and so stubborn and so stupid for so long. But the religious environmentalism is still pretty fanatic and they will not give up their cherished dogma and their entrenched positions and their carbon scams so easily.
Controversial ‘backloading’ proposal rejected by MEPs
The European parliament has rejected proposals for ‘backloading’ to postpone the auctioning of 900 million carbon allowances for 2013-2015, in a bid to help boost the price of ‘polluters permits’.
The proposals have been much debated, with some believing that any interference in the EU’s carbon market – the biggest in the world – could undermine confidence in the emissions trading scheme (ETS).
However, others feel that the temporary backloading solution would give the ETS, which is considered to be a flagship policy in the EU’s climate change agenda, a much needed boost, increasing carbon prices and in turn stimulating investment and innovation.
On Tuesday, parliament rejected the proposals by a narrow margin, 334 MEPs voted in favour, 315 against, and 63 abstained. Carbon prices immediately fell by 44 per cent to a record low of €2.63 following the vote.
Matthias Groote, parliament’s rapporteur on the timing of auctions, said “I deeply regret today’s vote. It is the beginning of the repatriation of climate policy.”
Traders took the lack of political support as a signal to sell, driving the market down to its lowest yet. Immediately after the vote, carbon prices dropped by around 40 percent to 2.63 euros a tonne. They were trading at 3.15 euros, down 33.4 percent, by 1423 GMT.
“The carbon market is now in a coma, until a clear intervention takes place,” an emissions trader said.
The Commission’s backloading proposal was meant to be a quick fix that could be agreed by the end of last year.
But it exposed deep divisions, with interest groups intensively lobbying members of the European Parliament.
Hedegaard, together with analysts and some in the energy sector have warned that failure to agree on EU steps would spur fragmentation in environmental policy as member nations move to safeguard their own green targets. Britain, for instance, already has a carbon price floor.
Of course the “loony left” were appalled:
“This kind of politics plays into the hands of climate sceptics. The rejection of the backloading proposal weakens the EU emissions trading system and puts our climate goals at risk.”
S&D deputy Linda McAvan said that the UK Tory party played an instrumental part in rejecting support for the EU’s carbon market.
She said, “In a tight vote in the full session of the parliament in Strasbourg, most Tory MEPs chose to side with climate sceptics once again and undermine their own government’s climate strategy.”
She continued, “They put their fanatic euro-scepticism ahead of British jobs and our environment,” adding, “This vote is a catastrophe for the environment.”
Greens MEP Keith Taylor also condemned the UK’s Tory party, as well as UKIP, saying, “Some MEPs want to leave the EU carbon market to sort itself out, but this simply won’t work.
“The ETS is flawed and leaving it alone won’t get us anywhere towards improving it. By opposing necessary steps to fix these problems Tory and UKIP MEPs are effectively signalling their desire to destroy the EU’s flagship climate change policy.”
Climate action commissioner Connie Hedegaard also expressed “regret” about the decision by parliament, and said that the proposal will now go back to the environment committee for “further consideration”.
She added, “The commission remains convinced that backloading would help restore confidence in the EU ETS in the short term until we decide on more structural measures.
“We will now reflect on the next steps to ensure that Europe has a strong EU ETS.”
Josche Muth, secretary general of the European renewable energy council, said that the decision “renders the ETS impotent as a tool for shifting investments into less polluting generation technologies”.
But at least some sanity is returning
However, it wasn’t just the 315 MEPs who voted against the proposals that disagree with the proposals.
BusinessEurope also welcomed the decision, with the director general Markus J. Beyrer saying that, “The European parliament expressed its support for a market-based instrument and rejected political interference.
“It is time to move past the divisive and unhelpful debate around backloading and focus on the real priorities for the EU: how to secure a cost-competitive, secure and climate-friendly energy policy for 2030.”