Pay more to emit

The Sunday Times
April 5, 2009
Green Digest

THE price of permits to emit carbon dioxide should be at least £85, about eight times the present price, if they are to meet their goal of getting big polluters to cut emissions, according to a government-sponsored study.
The findings, which will be published later this year by Chris Hope of Cambridge University’s Judge Business School, will shock industry at a time when pollution permits under Europe’s Emissions Trading Scheme (ETS) are trading at about £11 per ton.
The government commissioned Hope to assess the effectiveness of the ETS, the system under which companies are set limits on the amount of carbon dioxide they can emit. Those that exceed their limits must buy permits from others who have come in below their quota.
Hope is expected to say that the ETS is deeply flawed and that carbon permits should cost at least £85. He will suggest that a “green tax” on top of the carbon price may be necessary.