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Carbon Prices Rise on EU Backloading Vote

EU flagThe European carbon market is breathing a little easier after the continent’s parliament passed a price-boosting measure one year in the making.

On Wednesday lawmakers voted 344 to 311 for the “backloading” bill, which would hold about 900 million allowances off the market, and the initial reaction was positive, with carbon credit prices rising 9 percent on the day to about €4.70 ($6.13) per ton, the New York Times reported.

Analysts cautioned that the long-term effect on prices could be limited, as 900 million is only about half of the surplus expected by 2020. But Wednesday’s action could the first step towards a path of lasting reforms that could resolve the carbon glut.

Even this measure, however, is not yet settled. The parliament, European Commission and Council of Ministers must now support the bill and agree a compromise package to send back to parliament for a final vote, probably in October or November, Reuters reports. Britain and France support the measure, Germany and Spain are undecided, and Poland is opposed.

Tamar Wilner is Senior Editor at Environmental Leader PRO.

Picture credit: Rock Cohen via Flickr

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