Harmful emissions trading scheme is EU mechanism that allows the issuance of free emission quotas, and this mechanism could bring huge profits to companies from energy sector of five EU countries. Those profits can go up to 71 billion euros in next four years.
Studies for World Wildlife Fund - WWF conducted by carbon gases market research company called “Point Carbon” showed that in second phase of EU emission trading scheme (ETS) – EU key market mechanism for greenhouse gases emission reduction - energy sectors in Spain, Italy, Germany, Great Britain and Poland will achieve profits that are more than twice larger than gross domestic product of Slovenia.
ETS defines penalties for companies that exceed emission levels above certain permitted level, but that penalties can be avoided by buying emission permits. This increases the cost of electricity from this companies and that makes clean renewable energy sources relatively inexpensive.
But, existing interim system allows free quota issuing for large number of companies, and those companies are taking advantage of this free quotas by transferring costs of buying quota to electricity price, regardless of whether they received their quota for free or they were required to buy quotas.
The EU is currently negotiating about the way the ETS will function after year 2013, and main goal is to force energy sector to buy all their quotas. Of course, the main companies are strongly against that proposal.
WWF supported EU emissions trading scheme from beginning, but in the same time they warned that more conscious implementation is needed to achieve a full potential. WWF supports idea that revenues from selling quotas must be reinvested in climate protection measures in EU and developing countries. Those measures are financial obligations drawn at a climate change conference at the end of the last year at Bali.