June 29, 2006

Britain’s Tighter CO2 Goal Still Misses Target

LONDON (Reuters) - Britain said on Thursday it will cut carbon emissions under phase two of the European Emissions Trading Scheme by nearly 3 percent from the first phase which expires next year, but admitted it will still miss its own targets.

Environment Secretary David Miliband told parliament the annual quota of emissions permits between 2008 and 2012 will fall to 238 million tonnes of carbon dioxide.

Earlier this year, after a long fight with the Department of Industry which wanted only small cuts, DEFRA set out a range of possible cuts of between three and eight million tonnes a year.

"Our decision to set the cap at the top end of the range on which we consulted sends a clear message that the emissions trading scheme is here to stay," Miliband said.

Britain proposes to auction 7 percent of permits, which were all free in the first phase of the scheme.

But Miliband admitted that on current efforts Britain will only manage to cut its carbon emissions by 16.2 percent from 1990 levels by 2010, well short of its self-imposed target of a 20 percent cut.

He failed to propose sector targets for emitters within the overall cap, something that all EU nations are supposed to have set out by Friday.

Miliband also said that business will be allowed to use the Clean Development Mechanism of the Kyoto Protocol on cutting greenhouse gas emissions to help meet its EU obligations.

He said businesses will be allowed to buy up to 19.5 million tonnes worth of pollution permits a year under the CDM.

The government estimated the proposed ETS phase two cap would add one percent to industrial energy bills and about 0.5 percent to household bills.