European environment commissioner Stavros Dimas has today argued that the European Emission Trading Scheme (ETS) had already proved successful at curbing emissions and is on track to deliver real cuts in emissions from this year.
He was speaking at the publication of new data showing that greenhouse gas emissions from firms covered by the cap-and-trade scheme increased by 0.68 per cent in 2007 when adjusted for an increase in the number of installations covered by the trading scheme.
The small increase in emissions provided further evidence that carbon caps were set too high during the first phase of the scheme, leading to a collapse in the price of carbon credits and providing the energy producers and heavy industrial firms covered by the scheme with the freedom to continue to increase their emissions.
However, the European Commission was keen to hail the results as a success, given that the 0.68 per cent increase in emissions was significantly lower than the 2.8 per cent increase in EU GDP that was recorded last year.
"Emissions trading is yielding results," said Dimas. "Studies show that emissions would most likely have been significantly higher without the EU ETS."
However, he added that the increase in emissions vindicated the commission's decision to set far more lower emission caps from this year, a move that has seen the price of carbon credits soar in recent months to over €25 (£20) per tonne.
"The small rise last year further confirms the need for a strict emission cap for the second trading period that started this January," he observed. "This will help Europe to fight climate change effectively and reach its Kyoto emission targets."
A spokeswoman for analyst firm Point Carbon agreed that the ETS was likely to prove more successful this year as the lower carbon caps begin to take effect, forcing firms to either curb emi ssions or face a hefty bill when buying in extra carbon credits.
However, she questioned the level of success achieved during 2007, noting that while increases in emissions were lower than increases in GDP, this was not necessarily the best means to gauge the scheme's effectiveness. She argued that a shift towards coal prompted by high oil prices had resulted in increased emissions from many energy producers, and while heavy industrial firms may have recorded more modest increases in emissions, it was unclear if this was due to investment in cleaner technology or falls in production.
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