Understand the Implications That a Low Carbon Allowance Price Has On the Overall Effectiveness of the EU Emissions Trading Scheme.

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c41453) has announced the addition of the new Datamonitor report entitles "European Utilities: The EU Emissions Trading Scheme Will Fail To Deliver" to their offering.

We predict that the EU emissions trading will fail to incentivise carbon abatement going forward, leaving a void of uncertainty in Europes energy sector. An over allocation of emissions credits in the first phase is subduing the price of carbon. A continued lack of policy cohesion will undermine the schemes second phase leading the EU to collectively miss its Kyoto targets.

Scope of this title:

--An overview of the key factors which are undermining the traded price of European carbon emissions credits.

--An understanding of the impact that low carbon prices have on the abatement strategies employed by power generators.

--An assessment of the potential policy floors and market distortions that lie ahead in the second phase of European emissions trading.

Highlights of this title:

--National Allocation Plans are overly generous in first phase of EU emissions trading. In 2005 the ETS scheme had a 2.4% excess of allowances. The ability of participants to bank these additional credits will suppress the price of carbon until 2007 at least.

--Despite the higher concentration of carbon in coal, the costs associated with emitting carbon are not sufficiently high to offset the impact of high wholesale gas prices. It was still significantly more profitable for generators to burn coal as opposed to gas when carbon reached its record high above EUR30 per metric tonne.

--The inability of the European Commission to demand appropriate carbon quotas cuts from key emitters will see the EU miss its collective ETS and Kyoto targets, undermining the reputation and validity of the entire scheme.

Reasons to order your copy:

--Understand the implications that a low carbon allowance price has on the overall effectiveness of the EU emissions trading scheme.

--Gain insight into the importance of fuel switching and the factors that incentivise generators to burn either coal or gas for power production.

--Assess the structural barriers and market impediments that European emissions trading faces beyond 2007.

Prediction:

--EU emissions trading fail to incentivise carbon abatement, leaving a void of uncertainty in Europe's energy sector.

Summary:

--An over allocation of emissions credits in the first phase subdues the price of carbon below the necessary levels to promote genuine carbon abatement investment. A lack of policy cohesion consistently undermines Europes attempt to get the second phase back on track and the EU collectively misses its Kyoto targets.

Analysis

--Europe pins hopes on a market-based mechanism to tackle climate change

--EU Directive is not uniformly transposed into national law

--National Allocation Plans are overly generous in first phase

--Traded carbon prices are not expensive enough to incentivise fuel switching

--Brussels fails to establish necessary second phase quota cuts

--Germany wants to exempt new plant builds from emissions curbs

--Price signals do not promote long-term abatement investment

--Coal generators will benefit the most from ETS failure

--Global emissions trading scheme hampered by Europes failed attempt

--European emissions trading limps on, while focus shifts back to national policy instruments

For more information visit http://www.researchandmarkets.com/reports/c41453