New Scientist is reporting that, "The European Commission set tough new caps on carbon dioxide emissions for 10 nations on Wednesday [30 November 2006]. The move means Europe has taken a significant step towards meeting its Kyoto Protocol commitments... Experts say the allowances are stricter than for the scheme's first phase, from 2005 to 2008. Overall, the European Commission (EC) set the allowances almost 7% below the levels requested by the national governments. They are also 7% below the actual recorded emissions in 2005". Crosslands Bulletin (via subscription) notes that "Consultants, brokers, and environmentalists are cheering the European Commission in Brussels". Crosslands also mentioned that: - "Traders awaited the response to the German plan most anxiously. Germany is Europe's largest emitter of carbon dioxide. German industries covered by the emissions trading program during its first phase had a windfall 14 million metric tons of spare CO2 allowances in 2005. The bounty contributed to a brief collapse in the price of emission allowances when oversupply was reported earlier this year".
The upshot seems to be that some European Union-based emitters will have just enough, and others not enough, credits to cover actual emissions in the future: hence real action can be expected soon. We can't wait for the WSJ Editorial Page and CEI takes on this story. No doubt the sky will be seen to be falling.