Climate talks starting Nov. 26 in Doha, Qatar, may help trigger a tighter emissions-reduction target in the European Union within three years, according to Chris Rogers, a Bloomberg Industries analyst in London.
While Poland, for instance, is not immediately interested in supporting tighter carbon limits, the United Nations Framework on Climate Change Convention talks through Dec. 7 may prompt the start of negotiations among EU member states, Rogers said today by phone. “Something could be sorted in the next two to three years.”
A tighter cap would boost carbon permits, which already advanced 37 percent since a record low on April 4, Rogers said today in an research note. “A rise in the CO2 price would aid generators via higher power prices, and raise the value of the industrials’ surplus permits.”
The EU has pledged to cut emissions by at least 20 percent in the two decades through 2020 and as much as 30 percent, assuming other developed nations agree to make cuts.
The European Federation of Energy Traders suggested this week the region could boost the pace of yearly carbon-reduction cuts in its emissions market to help deal with a glut of allowances and ease cuts needed after 2020.
“If the trajectory were to be aligned with the EU long- term targets in 2013, this could already be met with relatively modest efforts and a reduction factor of 2.2 percent,” the lobby group said in a position paper published on its website and dated Oct. 16. Under current rules, the factor is 1.74 percent a year.
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