“It is crucial that Europe implements a 30% cut in carbon by 2020. And it’ll make us globally competitive too” Ya just can’t make this stuff up
This week ministers from across Europe are meeting to tackle a threat to our shared prosperity: the crashing price of carbon. The EU has the world’s largest international emissions trading scheme (ETS). The amount of carbon that companies can emit is capped, and each firm has its own allocation of carbon permits, which they trade freely. Ultimately, cutting carbon can yield financial rewards.
But the price of carbon has plummeted. In 2006 a tonne would fetch around £28. Now – thanks to the downturn, and a glut of permits – it’s barely £6. That’s bad for the environment: when it’s cheap to pump out carbon there’s less incentive for firms to go green. But it’s also bad for the economy, because it makes Europe less attractive to low-carbon investment.
The global low-carbon market is worth more than £3tn, and supports over 900,000 jobs in Britain. And those numbers can grow. The world’s savviest states are embracing low-carbon markets. We can’t afford to lose out.
That’s why the coalition has introduced a carbon price floor – a minimum cost to give investors the certainty they crave. We want Europe to take a similarly tough line. In the forthcoming talks, we’ll be calling for a more ambitious EU emissions target, and a set-aside of permits to strengthen the ETS. A Europe-wide agreement to a 30% reduction in emissions by 2020 will drive up investment – and the ETS carbon price. Moving to 30% is a key commitment in the coalition’s programme. There are five compelling reasons why we must act.