The European Union's flagship climate chance project is collapsing

Another piece of good news from the European Union: the EU's  "flagship" climate change project, the European Emissions Trading System (ETS) is close to a collapse:

Indeed, the market for carbon credits has reached new lows. On Thursday, the price of carbon credits dropped 40 percent within 30 seconds before regaining most of the losses. In an indicator of just how vulnerable ETS threatens to become, the volatility followed a nearly meaningless vote for a non-binding recommendation by the industry committee of the European Parliament that the backloading plan be rejected.

Energy-heavy industries and coal-dependent countries like Poland argue against market intervention in the ETS while noting that higher carbon prices leads to higher energy costs that result in a burden on businesses while European economies remain weak. The arguments against intervention may be working, as Germany -- which also harbors deep concerns about the burden cap-and-trade could have on industry -- continues to stall, and the ETS remains mostly useless. A failure on backloading would likely drop carbon credits to a level only slightly above penny stocks.

"This should be the final wake-up call," said EU Climate Commissioner Connie Hedegaard, according to wire reports. "Something has to be done urgently. I can therefore only appeal to the governments and the European Parliament to act responsibly."

Indeed, the failure of the ETS should be a wake-up call for all sane European - and international - decision makers: It is time time to sink the senseless ETS "flagship" and start concentrating on solving real problems!