Carbon Commerce

Emissions trading has a turbulent takeoff in Europe

6 min read

Since its launch in January 2005, the European Union’s carbon trading system has exploded into a market totaling nearly US $20 billion, providing a model for countries seeking to limit carbon dioxide emissions. The Europeans have demonstrated beyond doubt that the right to emit CO2 is destined to be a major internationally traded asset—but their experience to date also exemplifies some of the pitfalls the rest of the world faces in establishing such trading systems. The price for the right to emit a metric ton of carbon has fluctuated wildly in Europe’s carbon markets, from a high of ¤30 (US $39) in early 2006 to a low of ¤3.40 in January 2007, amid much controversy about the system’s basic design and regulation.

”It is an obvious and crucial point,” says James Cameron, vice chairman of the London-based investment bank Climate Change Capital, ”that this is a policy-driven market. It can’t be made to work unless governments impose the proper constraints on greenhouse gas emissions.”

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This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

Hundreds of charging stations for electric vehicles dot Utrecht’s urban landscape in the Netherlands like little electric mushrooms. Unlike those you may have grown accustomed to seeing, many of these stations don’t just charge electric cars—they can also send power from vehicle batteries to the local utility grid for use by homes and businesses.

Debates over the feasibility and value of such vehicle-to-grid technology go back decades. Those arguments are not yet settled. But big automakers like Volkswagen, Nissan, and Hyundai have moved to produce the kinds of cars that can use such bidirectional chargers—alongside similar vehicle-to-home technology, whereby your car can power your house, say, during a blackout, as promoted by Ford with its new F-150 Lightning. Given the rapid uptake of electric vehicles, many people are thinking hard about how to make the best use of all that rolling battery power.

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