Earth Equity News

Central and Eastern European 'Hot Air' Carbon Credits Continue to Undermine E.U. Cap-and-Trade Effectiveness. By Paul Voosen, Greenwire, November 9, 2009. "A surplus of U.N. carbon emission credits piling up across Central and Eastern Europe is threatening to destabilize nascent carbon markets across the world and dampen efforts to curb global warming, market... Already this year, sales of emission credits from countries like the Czech Republic, Latvia and most notably Ukraine have caused the price of a ton of carbon in Europe's cap-and-trade system to plunge by more than a euro, a significant drop, said Kevin James, the vice president of carbon finance at Climate Change Capital. To date, some 147 million tons of the credits -- known in U.N. legalese as assigned amount units and in policy circles as 'hot air'... Ukraine alone is estimated to be in negotiations to sell an additional 450 million tons to Japanese firms... 'It's a hot potato that no one wants to touch,' said Peter Zapfel, an official at the environment directorate of the European Commission... Credits are building up largely thanks to the economic malaise that afflicted Central and Eastern Europe in the 1990s. The rapid decline and deindustrialization of post-communist countries means they won't come close to using the amount of emission credits granted to them by the United Nations' previous round of climate talks last decade. Because of the gap between prediction and reality, these countries are expected to have a stockpile of 6.5 billion tons of CO2 credits by 2013, mostly held by Russia and Ukraine. For comparison, the United States emitted a total of some 6 billion tons of carbon dioxide in 2007... The looming conflict over the excess emissions is a prime example of how flawed policies, bad data and optimistic growth projections can undermine government-created trading."