The UK has now started to sell off carbon permits via an auction. This also has the benefit of raising much needed revenues.
British Carbon Sale To Swell Government Revenues [PlanetArk]
LONDON - The British government will take hefty revenues from its first carbon emissions permit auction on Wednesday rather than earmark the money for consumers or the climate it aims to protect, analysts and lobby groups said.
The UK's Department of Energy and Climate Change (DECC) will auction 4 million permits out of a total 84 million from the second phase of the European Union's Emissions Trading Scheme (EU ETS), which runs from 2008-12.
It plans to auction a further 25 million of the credits, called EU Allowances (EUAs), next year.
Wednesday's sale, which could set a model for more in the coming months, will raise around 67 million euros ($84.58 million) for government coffers, based on Tuesday's EUA price of 16.8 euros per tonne.
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UK Sells Carbon Emissions Permits In First Auction [PlanetArk]
LONDON - The British government sold 4 million permits in the country's first auction of European Union carbon emissions allowances but held that revenues would not necessarily be used to fight climate change.
The permits, called EU Allowances (EUAs), were sold on Wednesday to industry at 16.15 euros a tonne, raising 64.6 million euros ($81.55 million) for the British Treasury.
Under the EU's Emissions Trading Scheme, companies receive a set quota of permits to emit greenhouse gases which they can trade with other participants, thus putting a price on polluting.
This is the first EUA auction in the scheme's second phase, which runs from 2008-2012, and was open to participants globally.
"Today's first Phase 2 auction demonstrates continued UK leadership in reducing carbon emissions as part of the fight against dangerous climate change," the UK's Energy and Climate Change Minister of State Mike O'Brien said in a statement.
Britain's Department of Energy and Climate Change plans to auction a further 25 million EUAs next year.