Climate

Carbon pricing: will California win over Europe?

English

Interesting contrast between the EU carbon market and the proposed market in California in the new issue of Carbon Positive, which argues that the California price will quickly be high enough to drive investment in renewables, whereas the EU price will continue to languish unless the EU moves to more ambitious targets (the 30 per cent below 1990) and reduces the use of offsets. The difference is significant, according to a Societe Generale forecast from last October: at 20 per cent and allowing offsets, the price is predicted to be E20 by 2020/ At 30 per cent and restricting offsets, it rises to E60, at which point it becomes seriously useful. With China’s interest in low carbon growth rising, this is not the time for the EU to throw away its lead in this field. With the present system, a serious carbon price is the key both to innovation and to the transformation that climate targets need. What is the EU waiting for?