The "Permit to Pollute"

Last month in his analysis for the BBC of the report released by the Intergovernmental Panel on Climate Change (IPCC) on the mitigation of climate change, Richard Black point out that there may be too much reliance on the economic machinery of a carbon credit market that overlooks how much of this market remains unregulated and the risk of the entire market turning into an economic bubble. Almost exactly a month later Julian O' Halloran prepared a report for BBC File On 4 on the failure of the Emission Trading Scheme, the specific "economic machinery" behind the carbon credit for the European Union. Calling the carbon credit itself "essentially a permit to pollute," he demonstrates how the specific EU plan has led to three undesirable consequences:

1. Consumer electricity bills have increased.
2. Power companies are enjoying windfall profits.
3. The anticipated result of a reduction in greenhouse gases has not been achieved; in fact figures seem to indicate "that CO2 emissions across the EU also rose by between 1 and 1.5% over the last two years."

The "official response" came from Ian Pearson, Minister for Climate Change:

If you are saying to me it hasn't achieved a massive amount so far when it comes to CO2 reductions, well I agree with you and I think Phase Two will be a big, big improvement...and a key instrument in helping us all to achieve our carbon reduction targets across Europe.

The question that O' Halloran is raising, however, is whether or not we can afford to wait for "Phase Two," particularly in a context of free market economics that places the prosperity of specific business interests over the well-being of the plainet and its population.