The Economist on the EU's Emissions Trading Scheme: "Below Junk Status"

The Economist has been a proponent of  the strong form of Anthropogenic Global Warming Theory and of carbon trading as a policy response for as long as I can remember. Last month's "The Economist: "Over the past 15 years air temperatures at the Earth’s surface have been flat while greenhouse-gas emissions have continued to soar." showed some concerns about the science. Now they report, without any of the expected emotion, on the probable death of the ETS:

EUROPE’S flagship environmental policy has just been holed below the water line. On April 16th the European Parliament voted by 334 to 315 to reject proposals which (its supporters claimed) were needed to save the emissions-trading system (ETS) from collapse. Carbon prices promptly fell 40% (see chart). Some environmentalists fear that the whole edifice of European climate policy could start to crumble.

The ETS has long been troubled. The scheme is the world’s biggest carbon market, trading allowances to produce carbon which cover about half the European Union’s total carbon emissions. Partly because of weak industrial demand and partly because the EU gave away too many allowances to pollute in the first place, there is massive oversupply in the carbon-emissions market. Prices fell from €20 a tonne in 2011 to just €5 a tonne in February 2013.

The European Commission, the EU’s executive arm, therefore hatched a plan to take about 900m tonnes of carbon allowances off the market now and reintroduce them in about five years time when, it was hoped, demand would be stronger (“backloading” in the jargon). This was the proposal the European Parliament turned down.

The rejection was a surprise. The parliament’s environment committee had looked at the plan in February and approved it by a surprisingly wide margin of 38 votes to 25.

As expected, most members of the largest political alliance, the centre-right European People’s Party, voted against the proposal. This was needed, they argued, to protect consumers from higher energy bills. What came as a surprise is the fact  that all but four British conservative members of the European Parliament also voted against the plan. In doing so they defied their own government, which has introduced a carbon floor price in Britain that could soon be higher than the European carbon price. And the European Socialists, which had been expected mostly to back the proposals, instead split, with 44 in favour of the plan and 31 against....MORE

The world turned upside down.
As I said a couple weeks ago in "Parabolically Speaking: The Trouble With Artificial Markets" :

...Anyhoo, price charts of the European Emissions Trading Scheme or the U.N.'s Certified Emissions Reduction units, over almost any timeframe, all have the same general appearance, a line from top left to bottom right:...

See also:
Carbon Market Collapses After European Parliament Vote Against Plan to Manipulate Prices Higher