Breaking News, World News and Taiwan News.

Updated Thursday, December 22, 2011 0:22 am TWN, By Gabriele Steinhauser, AP



	In this Dec. 16, 2009 file photo, steam and smoke rise- from a coal power station in Gelsenkirchen, Germany. Europe's main weapon in the battle against climate change is now fighting for its own survival. In early January, investors in the continent's cap-and-trade system still had to pay some 14 euros (US$18.30) for the right to emit one ton of carbon dioxide into the air. (AP) Enlarge Photo

Sponsors
▪	Save 75% for all hotels in Shanghai, Beijing and whole China. Lowest rates for Flights in China.
▪	Get the best deals for Guangzhou Hotels or choose from more than 10,000 hotels in 499 Chinese cities.
▪	Find great real time deals on China Flights. Book flights to China or China domestic flights 24/7.
▪	Buy china wholesale products from reliable chinese wholesalers on DHgate.com!

Europe fights to save cap-and-trade as crisis hits

BRUSSELS--Europe's main weapon in the battle against climate change is now fighting for its own survival.

In early January, investors in the continent's cap-and-trade system still had to pay some 14 euros (US$18.30) for the right to emit one ton of carbon dioxide into the air. By last week, the price of one emission allowance had tumbled to a meager 6.41 euros — making it much cheaper to pollute and slashing the financial incentives for companies to invest in low-carbon technologies.

Analysts warn that the prospect of another recession in the debt-ridden continent, and the accompanying decline in emissions, could push prices below 2 euros by the end of next month.

The troubles in the carbon market, a system being watched closely from California to China, is linked to the struggles of Europe' other ambitious project, the euro. And just as financial investors have looked to the European Central Bank to save the currency through massive intervention in the bond markets, analysts say the emissions market may need similar centralized help.

Last week, 19 companies, including oil giant Royal Dutch Shell PLC, Philips Electronics NV and supermarket chain Tesco PLC, sent a letter to the European Commission urging it to reduce the number of emission allowances in the system and figure out how to protect the market from future economic shocks. The commission and national governments jointly manage the cap-and-trade system.

“The lower price is really undermining the development of technologies that will be needed in the decades to come,” said David Hone, Shell's climate change adviser.

Shell, which is mostly known for selling oil and gas, has been one of the pioneers of carbon capture and storage, projects in which CO2 emissions are stored underground so they don't get released into the atmosphere and contribute to global warming. But investing in new technologies like carbon capture and storage only becomes commercially viable at a carbon price of between 25 euros and 30 euros, Hone said.

1|2|Next Page>>