Comment on UK Emissions Trading Scheme

Commenting on the clearing price for the initial auction of the UK Emissions Trading Scheme, Dr Jonathan Marshall, Head of Analysis at the Energy and Climate Intelligence Unit (ECIU) said: “The first UK emissions auction clearing close to EU prices will bring a sigh of relief for industry and for policy makers. A smaller market and uncertainty about interventions to curb price spikes brought pre-auction worry that the permit prices would soar above those on the mainland and be volatile – potentially damaging the efficacy of carbon trading as a means of cutting carbon.

“Clearing this first hurdle means attention can be turned to the future, taking decisive action to end free permits that undermine the whole purpose of carbon pricing, setting a net zero-aligned trajectory and thoroughly assessing a link with the EU scheme. The government has made it clear that it wants carbon pricing to be part of the journey to net zero, this is the opportunity to make that happen.”