The Carbon Trading Boondoggle: Evidence from Europe
Nicolas Loris /
Apparently people forgot to mention to the central planners in Europe that prices fall during a recession. That includes carbon prices:
Set up to price pollution out of existence, carbon trading is pricing it back in. Europe’s carbon markets are in collapse.
A year ago European governments allocated a limited number of carbon emission permits to their big [emitters]. Businesses that reduce pollution are allowed to sell spare permits to ones that need more. As demand outstrips this capped supply, and the price of permits rises, an incentive grows to invest in green energy. Why buy costly permits to keep a coal plant running when you can put the cash into clean power instead? (more…)