London, 8 February 2010

Commenting on the report of the House of Commons Environmental Audit Committee ‘The role of carbon markets in preventing dangerous climate change’, David Porter, Chief Executive of the UK’s Association of Electricity Producers said:

‘It is the imposition of the cap on emissions, not the market or the trading, that reduces greenhouse gases. The cap is set by politicians, whereas the trading of allowances in the carbon market enables the industry to deliver solutions efficiently. The market works. It is the politics that is failing. At the Copenhagen climate change talks, the world’s politicians were invited to show how much they believed in reducing man-made CO2 emissions. But, there was a wishy washy outcome.

‘At European level, the electricity sector has made clear that it can deliver a carbon neutral electricity industry by 2050 (see the Eurelectric Declaration by 60+ Electricity Industry Chief Executives, March 2009). The UK’s electricity industry is ready to play its part, but, it needs clear and robust emissions limits that are in tune with the long timescale of its capital investment.

‘The Environmental Audit Committee seemed almost to regret that the recession has made targets easier. In fact, it has reduced emissions. In response, the Committee seems to want the EU to make additional ad hoc reductions. I cannot emphasise too strongly that the impact of the EU Emissions Trading Scheme must offer long-term clarity and predictability to companies that have such huge investments to make. Politicians should be very wary of the impact on investors of unpredictable afterthoughts.’

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