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  • Published: Jan 30th, 2009
  • Category: UK
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Carbon trading may be the new sub-prime, says energy boss


| Sourced From Scenta |

The row over the working of the European Union’s emissions trading scheme intensified last night when EDF Energy warned that speculators risked turning carbon into a new category of sub-prime investment.

Vincent de Rivaz, the chief executive of the UK arm of the French-owned gas and electricity group, said politicians and regulators needed to revisit the way the ETS was working and whether it was bringing the results they wanted. “We like certainty about a carbon price,” he said. “[But] the carbon price has to become simple and not become a new type of sub-prime tool which will be diverted from what is its initial purpose: to encourage real investment in real low-carbon technology.”

Green campaigners have long been critical of the way the emissions trading scheme was set up, but it is unusual for a leading industry figure to cast doubt on it, as power companies lobbied hard for a market mechanism to deal with global warming.

“We are at the tipping point where we … should wonder if we have in place the right balance between government policy, regulator responsibility and the market mechanism which will deliver the carbon price,” said de Rivaz.

De Rivaz’s comments came as Tony Hayward, chief executive of BP, emphasised that a predictable global carbon price was important because it would make “vast numbers of alternative energy sources competitive”. He told the World Economic Forum in Davos that certainty over carbon emissions would help “solve the world’s energy problems”.

Their comments came days after the Guardian revealed that steelmakers and hedge funds were cashing in ETS carbon credits obtained for free, causing the price of carbon to plunge. The price of carbon has slumped from

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