Benchmark allowances fell as much as 3.3 percent Friday as Segolene Royal, France’s energy and environment minister, at a conference in Paris urged EU members to consider adopting a floor in the market as “the price of carbon in Europe isn’t high enough to trigger investments needed to replace coal.” Permits have dropped 28 percent this year.
EU Climate and Energy Commissioner Miguel Arias Canete last week repeated his doubts that regulated price levels would work, saying a decision on which figure to choose would need unanimous support by member states. Europe continues to struggle with a glut that’s the equivalent of about a full year of allowances. China, South Korea and North American states and provinces are among regions progressing with carbon-pricing plans.
“I’m skeptical” that France’s minimum-price plan would ever win enough support to be enacted, Anatoly Stolbov, an analyst at Virtuse Energy s.r.o. in Prague, said by e-mail. “Low price is just a symptom that the system is not healthy. As with any health issue, one should treat the root problem, not the symptom,” he said.