The collapse of the European emissions system over the last few weeks is a serious indicator of the loss of interest in the issue of climate change among the top policy makers, especially in Germany. Unless the market can find a new credibility the whole structure of the European climate agenda looks vulnerable.
The latest crisis has been triggered by the defeat in the European Parliament of proposals to postpone the auctioning of new permits under the European Emissions Trading Scheme. The aim of the proposal was to keep the markets alive and functioning. The effect of the defeat, which does nothing for the reputation of the Parliament as a serious policy making body, was a 30 per cent collapse in prices which in any case had fallen to so low as to be ineffective.