The EU Emissions Trading System (EU ETS) is siphoning billions from industry and consumers to plump up finance and energy fat cats, according a new Civitas report. The report reveals that, via the EU ETS, each EU citizen is effectively subsidising the power industry by £30 a year. [p. 13] In addition, the Government is adding more costs to UK families and businesses via the carbon price floor which sets a minimum price for carbon credits. This carbon price floor is expected to push another 110,000 British households into fuel poverty by 2016. [p. 61]....................
- Energy companies are charging higher prices because of the EU ETS without actually cutting emissions.By the end of 2012, European energy companies will have generated between €16-€50 billion in windfall profits from their access to free EU ETS credits while simultaneously passing the non-existent cost on to consumers. [p. 15]
- Harvesting carbon credits by deliberately generating additional emissions. The Clean Development Mechanism allows HFC-23 gas (normally a by-product of creating other gases for refrigeration) to be created purely for the purpose of destroying it in an environmentally friendly way. HFC-23 is 11,700 times more damaging than CO2. €2.8 billion worth of industrial gas credits have entered the EU ETS market, as entire businesses have sprung up, especially in China, dedicated to producing this gas. After intense pressure from industrial lobbyists, the scrapping of these credits was delayed from January to May 2013, so more credits can now flood the system. [pp. 17-27]
- Exploiting the badly policed international market to engage in fraud. This includes 'phishing' for passwords that allow credits to be transferred to criminals, as well as selling fake and already spent credits. 90 per cent of all market volume was estimated to be fraudulent in 2009. €5 billion have been lost in 'carousel' VAT fraud since the EU ETS's creation. [p.33-35]
In addition, major banks are profiteering from the EU ETS. Originally supposed to act as intermediaries for covered installations, they run auctions to manipulate and dominate the carbon credit market.
CO2.1, by David Merlin-Jones, is a comprehensive examination of how the EU ETS fails at its own goal of reducing carbon emissions. It details how carbon traders, banks, energy companies and the government are extracting billions from productive businesses and consumers via the EU ETS, while undermining the vulnerable UK economic recovery.
Ultimately, Merlin-Jones shows that the EU ETS is ineffective at reducing emissions. The strategy will do little for the environment until 2016 at the earliest, over ten years after its introduction. [p. 56] The result is more pain for the economy but without real relief for the environment:
CO2.1: Beyond the EU's Emissions Trading System is available from the Civitas shop (RRP: £12.50) and by calling 020 7799 6677.
