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Carbon 'leakage' should be prevented

13 December 2008

High carbon emitting industries could migrate to countries that have less stringent emissions regulation, according to Lords.

A report from the House of Lords' EU Committee noted the potential problem of so-called 'carbon leakage'.

It said that industries where this could become a problem should be indentified and could potentially receive free carbon credits to ease the regulatory burden.

Though the report said this should not be carried out until it was clear from next year's Copenhagen conference on climate change, it could stop industries from going abroad and avoid the situation of exporting UK carbon emissions.

The report called for a reform of the European Emissions Trading Scheme (ETS) to ensure all credits were auctioned instead of handed out for free.

Lord Sewel, chairman of the House of Lords EU Sub-Committee on Environment and Agriculture, said: "The gravity of the threat posed by climate change merits a bold response. Ambitious revisions to the EU ETS are necessary if the system is to meet its goals."

The UK has committed to cutting carbon emissions by 80 per cent in relation to 1990 levels by 2050.

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Author: Administrator User