Search Results for Tag: green economy
When climate pays for financial crisis
Once upon a time, politicians had a good idea for how to create incentives that make companies want to become greener. Companies were to buy certificates for the amount of carbondioxide they emitted – one certificate for every ton. The more carbon – the more certificates they had to buy. The less CO2, the less certificates. So far, so good.
Initially sold for 20 Euros a piece, the price of certificates rose to a record 32 Euros before embarking on a steady decline: At the end of January it dropped to an all-time low of 2,81 Euro. We were wondering what the reasons for and the consequences of this low price might be, so we’ve asked Christian Linden from the German Emissions Trading Authority to give us some input for our FAQ.
How come the price for emissions certificates is nose-diving so badly at the moment?
At present supply outweighs demand. That’s for a number of reasons: companies were allocated certificates too generously at the start of both, the initial and subsequent trading periods. Plus, the economic and financial crisis has led to a decline in industrial production, which in turn brought about a decline in CO2 emissions. As a consequence companies have accumulated a surplus in certificates, which is now flooding the market, bringing down the price.
Another argument could be that some companies have already became greener, which means they need fewer certificates (German source).
What happens if the price stays that low?
There is little incentive to invest in climate friendly technology, if it’s too cheap to carry on producing goods in a way that harms our climate.
What can be done to get the certificate prices to rise again?
In the short term, a good idea is what the EU commission has suggested: to temporarily keep a certain number of certificates – they are talking about 900 million – out of the market. In the longer run it’s important that on a political level an ambitious climate goal is agreed to reduce carbon emissions in the EU by 30 percent until 2020. This would raise the pressure on companies to reduce their emissions.
What’s the “right” price for a certificate?
It’d be a price that motivates businesses to reduce emissions and/or invest in climate friendly technology. For some companies this might start at 15 Euros a ton, fro others it may be closer to 25 Euros. So, here is no single “right” price.
DateFebruary 9, 2013
Tagscertificate, climate change, CO2, emission, emission certificate, emissions trading, green economy, low price
Eco-city in the desert – role model or image coup?
The world’s largest oil producer, the Arabic Emirate Abu Dhabi, is building an eco-city right into the desert: zero CO2-emission, energy only from renewables, electric cars moving in tunnels below surface.
Well-known architect Norman Foster is responsible for designing the one squaremile large green square. First complexes are already finished, the whole project should be finished in 2025. 40.000 people shall live there, working in the city with addional 50.000 commuters traveling to Masdar. The city is meant to become the epitome of renewable energy and sustainability – such as Silicon Valley is for computer and internet technology. To realize these visions the emirate of Abu Dhabi invests the stunning amount of $22 billion.
But there are more and more experts doubting over sustainability of Masdar City: some say, it would be more effective to spend the money in isolating the local Beduins’ houses for example.
What is you opinion on such model projects? A good idea to test researcher’s ideas in reality or a waste of money, that would have made more effort elsewhere?
DateDecember 29, 2012