Is the Carbon Market broken

01 August 2005

Carbon is being reduced and so the market is working but the costs are all being passed on to consumers, and so there are no real financial incentives for retaining customers.

Powerisk asks if the carbon market is behaving the way governments expected. There is no doubt that companies are reducing carbon emissions, this is the very nature of the market. There is also no doubt that it is hurting as prices have risen significantly higher than Europe and the world had predicted. This bodes well for clean air technology, and its development and for the future under Kyoto. Where the market has broken down is the governments decision to base the original years for measuring carbon emissions in the early 1990s when gas was the major fuel source in power generation. Where the market has broken down is when the cost of administration and the market rise in costs is passed directly to the customers. At the moment all the costs of this market are being passed to consumers, the price rises seen by EdF PowerGen and Centrica are rising, and this is because the fundamental costs have risen and they are within the licence arrangements allowed to put prices up as a result. It does seem a little unfair that the companies who can do most to alleviate carbon emissions and costs are not financially incentivised to do so.


Carbon  UK Government  Climate Change 

Related Articles
100 % Auctioning emissions will not work.  

06 July 2006


Emissions market responds very little to Polish news of excesses. But there is a growing argument for auctioning and will not work.  read more...

100 % EU ETS - Phase II Changes Recommended  

22 June 2006


A new study by the Carbon Trust urges changes to improve Phase II of the EU Emissions Trading Scheme. The study identifies 7 key challenges that if left, will result in incentives that do not support low-carbon investment, and suggests that changes are essential to maintain competitiveness and investment in Europe.  read more...

100 % Emissions market set for change  

01 February 2006


Creating markets is not that easy, and government plans for a mini-emissions market have all the hallmarks of political platitudes. Perhaps though the Americans and the UK are planning something which they cannot tell us, until more detail comes forth.  read more...

100 % Phase 11 NAP causing investment decisions now.  

23 December 2005


IP plump for FGD on the back of LCPD and Phase 11 NAP clarifications. HAPPY CHRISTMAS  read more...

100 % RWE nPower cries for clarification  

17 October 2005


The key to long term investment lies in a stable a market with few regulatory influences. The current UK market is the antithesis of this and so long term investment is being put on hold.  read more...


other articles on Carbon
Capacity Payments Discussed as a Tool to encourage Investment  

30 June 2010


In a week when the engineering industry, in its State of the Nation report, said that the Energy Industry gave the most cause for concern in light of security of supply, Energy Minister Charles Hendry spoke of 'Capacity Payments' as a tool to incentivise plant development.  read more...

Coal, Gas & Carbon all help to hold WInter Down  

28 April 2008


Contracts across the power curve opened strongly helped by the high prices reported in the oil markets.  read more...

Drax up against it  

05 March 2008


Drax profit margins fall as competition will only get harder.  read more...

Ofgem investigates  

21 February 2008


Finally an competition enquiry into the energy market has begun.  read more...

Coal weighs heavily  

14 February 2008


Coal prices have doubled in the last six months.  read more...


other articles on UK Government
We're borrowing less than expected....  

20 August 2010


As the government prepares its spending review it will no doubt welcome the latest figures that show net borrowing for July at £3.8bn. While still sizeable, this is £1.2bn less than forecast and well down on the £6.1bn that was borrowed in the same month last year.  read more...

Confidence knocked in the Financial Markets  

12 August 2010


Statements from around the world all suggest a stalled recovery while closer to home there are continuing signs of inflationary pressures at a time of slow to stagnant growth.  read more...

Energy Secretary gives the first annual energy statement to the Commons  

28 July 2010


Chris Huhne, the coalition government Energy Secretary yesterday gave the first annual energy statement to the Commons. He set out plans to secure energy supplies and cut carbon emissions. In all 32 measures were outlined all with the aim of helping the UK achieve the legally binding target to cut emission by 80% by 2050.  read more...

2nd Quarter Growth at 1.1%; What Role For Energy  

23 July 2010


Preliminary figures from the Office for National Statistics (ONS) suggests the UK economy grew by 1.1% in the second quarter, up from the previous quarter's 0.3%. While the figures are preliminary (and based on around 40% of the ultimate data), what they do show is that construction, a relatively small part of the economy, contributed significantly to this growth figure. With 6 out of 10 civil engineering firms looking to the energy and water sectors for their income streams, it seems energy has a role to play in underpinning the recovery.  read more...

A week of Positives  

09 July 2010


This was a week for good news in the Financial markets; the IMF upgraded its forecasts for world economic growth and there was increasing confidence that European banks would pass their stress tests. Borrowers were pleased, though not surprised that UK interest rates remained unchanged. Overall world stock markets recorded gains across the week.  read more...


other articles on Climate Change
Energy Secretary gives the first annual energy statement to the Commons  

28 July 2010


Chris Huhne, the coalition government Energy Secretary yesterday gave the first annual energy statement to the Commons. He set out plans to secure energy supplies and cut carbon emissions. In all 32 measures were outlined all with the aim of helping the UK achieve the legally binding target to cut emission by 80% by 2050.  read more...

Capacity Payments Discussed as a Tool to encourage Investment  

30 June 2010


In a week when the engineering industry, in its State of the Nation report, said that the Energy Industry gave the most cause for concern in light of security of supply, Energy Minister Charles Hendry spoke of 'Capacity Payments' as a tool to incentivise plant development.  read more...

Investing in the Future  

11 June 2010


The Wave and Tidal energy sector gets nervous ahead of the E-budget, concerned that funds will suffer as part of anticipated public spending cuts. Should this sector suffer?  read more...

Queens Speech: Energy Bill Outlined  

25 May 2010


The state opening of Parliament is history personified, wrapped in lashings and lashings of ceremony, pageantry and tradition dating back centuries. But for all its spectacle, there is the serious business of the Queen's speech (actually the Government's) which this year included details of this coalition government's Energy Bill.  read more...

No Financial Support for Nuclear  

17 May 2010


How will the coalition, that had such differing opinions about nuclear, find common ground?  read more...


Energy News by Date
2010 2009 2008 2007 2006 2005 2004
december november october september august july jun may april march february january
RSS Feed
Keep up to date on energy trading news.
Click here to subscribe
RSS
Day Ahead Electricity Prices

1y  6m  3m  1m
Powerisk Online
Powerisk Online tools and services.
Click here to login
Glossary
Glossary
Powerisk glossary of power terminology.
Click here for glossary
Glossary