A Disastrous Week for Carbon Trading

The European cap-and-trade system has slid into near meaninglessness as Germany bickers on the sidelines. Hopes that the election in Lower Saxony might resolve the high-level bickering were misguided. Now Europe’s carbon market has hit a new low.

For those involved in European Union climate policy, the German regional election in Lower Saxony on Sunday was a nail-biter. The hope for many was that Germany’s pro-business Free Democratic Party (FDP) would suffer defeat and leader Philipp Rsler, who has been under pressure within his party for weeks now, would be forced to step down as economics minister. But that didn’t happen. Instead, Rsler ended up in a stronger position than before, and the flagship project of Europe’s climate policy settled deeper into a lifeless coma.

For those interested, the “FDP” are the Free Democratic Party, who are similar to our Libertarians. The carbon market is also running up against obstacles because coal is still king in Poland.