A group of major European companies, part of the Prince of Wales’s EU Corporate Leaders Group on Climate Change, are calling for tighter rules for the EU cap and trade system and higher prices for carbon.  The group states:

Cap and Trade schemes, such as the ETS, are the best market mechanisms to deliver cost-effective reductions in greenhouse gas emissions. However, the economic crisis has significantly impacted the effectiveness of the EU ETS as seen by today’s low level of trading and carbon price. This impact, coupled with potentially distorting effects from other policy measures at national or EU level, threatens the ETS’s ability to deliver Europe’s low-carbon future at lowest cost.

We firmly believe that the simplest and most deliverable route to avoid such impacts is through an urgent recalibration of Phase III of the ETS by withholding allowances and designing a robust Phase IV that will send the right long term price and investment signal and will immediately strengthen the carbon price.

Companies signing the letter include Alstom, T-Mobile, Philips, Shell, Tesco Unilever, and Vestas. The letter and a press release are available at http://www.cpsl.cam.ac.uk/Leaders-Groups/The-Prince-of-Wales-Corporate-Leaders-Group-on-Climate-Change/EU-CLG.aspx