The UK has reinforced its reputation as a global centre for carbon trading by holding its first auction for Phase III allowances of the EU Emissions Trading Scheme in the City of London today.
According to DECC, London is now the location of 90 percent of EU carbon trading and 80 percent of global trading – a £90bn market.
DECC adds that the EU emissions trading scheme (EU ETS) is central to the government’s policy for reducing emissions and the UK was one of the first nations to auction in Phase II. It is one of the member states to sell the most allowances and is taking steps towards introducing a carbon floor price for the generation sector.
Today’s auction raised approximately £34m for the exchequer.
Climate change secretary Greg Barker said: “The UK is really leading the way in carbon auctioning, and today’s sale reaffirms London’s position as a global hub for the market.
“Not only does this help incentivise significant emission reductions and behaviour change amongst businesses, but it also generates millions of pounds in revenue each year for the Treasury, at little or no cost to the taxpayer. This is a win-win situation which makes both environmental and economic sense.”
The EU ETS was introduced in 2005 to help meet reductions agreed under the Kyoto Protocol. Phase III is expected to deliver reductions of 3,100 MtCO2e between 2013-2020 and sees the first sales conducted by private company IntercontinentalExchange in conjunction with the government.