Of course there are obvious reasons for this: it was not necessary. In the first trading period 2005-2007 no efforts had to be made to stay under the total cap of emissions the European Commission imposed on the thousands of companies participating in the ETS. But that will change in this second trading period 2008-2012, and especially after 2012, when emissions caps will become tighter and tighter.

The large growth in CDM projects (emissions reduction realised with projects in developing countries) shows that an exponential growth of measures and therefore emissions reductions are possible. CDM projects are all concrete projects, which aim at extra emission reductions compared to the baseline. Initially , it was very popular to reduce emissions of gases with a large global warming potential such as HFC-23, because they yielded many credits for low investments. But with the saturation of that market, renewable energy and energy efficiency are becoming more dominant.

As companies have a limit of emissions reductions achievable with CDM credits, the European market for low-carbon technologies is also witnessing a change. Over two thirds of all companies say they are already ready to take concrete measures in terms of energy efficiency and renewables.

This should put the emissions trading issue back into companies balance sheets again. It is nice to see that the global carbon market is taken to high levels by the financial departments of these companies, but it will even be nicer to see concrete achievement of emissions reductions.

Rolf de Vos
Editor in chief
GreenPrices
r.devos@greenprices.com