The article talks about the possibility of a vote on February 19th on whether to delay the sale of 900m tonnes of carbon allowances from around 2013-2016 to 2019-2020. If the European Commission's proposal is rejected, the emissions-trading system- the only EU-wide environmental instrument which trades allowances to produce carbon equal to half the EU's total emissions- will collapse. The price of allowances has fell to 5 euros per tonne of carbon, much lower than the expected price of 20 euros. The low prices were because of a chronic oversupply of carbon allowances (1.5 billion- 2 billion tonnes of emissions a year). The demand has crashed. If the proposal is rejected, the price can fall to zero, which means the trading market is gone. Also, temporary slide in the price could do permanent damage. Coal is cheap relative to cleaner forms of energy such as gas. As a result, power suppliers build more coal-fired plants and Europe emits more carbon. Rejection of the proposal would affect both Australia's and California's carbon market, as well as China and Korea, which are putting together theirs. A low carbon price would slow down Germany's plans to boost renewable energy. A collapse of EU's flagship policy would also throw into disarray European plans for future environmental reforms. But more than that, the oversupply of allowances would still continue unless the auctions for 900m tonnes of carbon allowances are cancelled, not just delayed.
Source: http://www.economist.com/news/finance-and-economics/21571940-crunch-time-worlds-most-important-carbon-market-extremely-troubled-scheme
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