EU Faces Vast Oversupply of Carbon Credits. By James Kantor, NYTimes, October 27, 2009. "A vast supply of pollution credits from abroad is threatening to overwhelm systems for capping and trading greenhouse gases, a senior European Union official warned. Critics have dubbed these pollution credits 'hot air' because many were generated by favorable accounting rules, rather than by measures and activities representing new emissions reductions... The main concern surrounds large numbers of carbon credits from Russia and Ukraine, which were earned under the Kyoto Protocol. Those countries' easily met Kyoto emissions reduction goals -- and therefore found themselves with a windfall of credits to sell -- when productivity collapsed with the disintegration of the Soviet Union 1990s. But some newer members of the E.U. -- principally Central and Eastern European countries -- also hold significant numbers of 'hot air' credits, complicating efforts by the Europeans to reach a common position that would restrict the use of the credits under a new climate accord to be discussed in Copenhagen in December. The availability of so many 'hot air' credits could dramatically depress the price that companies pay for emitting greenhouse gases, making it easy for them to meet their targets, and reducing their incentives to adopt more efficient practices and low carbon technology."
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