E.On in a speech to the Defra Business and Climate Conference, outlined their view that the carbon market needed some economic safety valves. This is something which the government would have listened too carefully. E.On outlined a scenario where the temperature had risen, and there were low water supplies, in the case Nuclear power plants would be switched off and the market would run during the summer purely on gas and coal, the need for emissions would rise to a point where there were not enough in which to generate and the escaltion would continue to a point where companies would be trading the bail out option number the government would have to deem. Interestingly, this situtation is unlikely but it would mean that the government would probably have to bail a counter-party out either in allowing more permits causing some players to site default and the whole market would collapse. This would be similar to Britain having to leave the ERM, in short Britain would have to leave the EU ETS. Perhaps E.On have a point, but maybe markets need to go to where it hurts most.