The big climate policy news today is the failure of the EU carbon market called ETS (emissions trading system).
For those unfamiliar with Europe’s cap-and-trade system, Bryan Walsh at TIME has a nice overview.
The Financial Times (free registration required) has more on the story, the upshot of which is that
[Europe’s] embrace of the climate issue cast a halo over the European project as a benign and collaborative force for good in the world. “It was an integral part of the brand,” said Tom Brookes, director of the European Climate Foundation.
These days, it is accepted – even by climate warriors like Mr Brookes – that global warming has been consigned to a seat in the waiting room while the EU tends to a chronic economic crisis that has threatened the single currency and increased unemployment.
International pressures played a key role:
The shale gas revolution in the US, which has lowered energy prices for the country’s manufacturers, has heightened Europe’s concerns about industrial competitiveness, according to Matthew Gray, a carbon analyst at Jefferies.
And the contagion spreads:
In Australia, Tony Abbott, the opposition leader, had already vowed to repeal a government policy to introduce a carbon market in 2015 – which would eventually link to the EU market – if his Liberal National coalition wins the federal election in September.
Greg Hunt, the shadow minister for climate action, pointed to the EU market’s price swings in the aftermath of Tuesday’s vote. “The European system to which the government has tied Australia’s electricity prices is now deeply unstable,” Mr Hunt said.
All of which reinforces the need for a global agreement and a strictly limited but suitably empowered global agency to enforce it.