AT At a time when we run from one emergency to another, it takes a lot of patience, trial and error and tenacity to see a good idea triumph. The idea in question, more than twenty years old, was that, to fight against global warming, it was necessary to give a cost to this new pollution. In other words, taxing carbon.
Allergic to taxes, Europe invented, in 2005, a complex system for trading emission quotas, listed on a market. Mocked for a decade for its inefficiency and derisory cost, it is now proving its relevance. By exceeding, Tuesday, February 21, the threshold of 100 euros per tonne, five times more than three years ago, it changes the situation.
Small example provided by FinancialTimes. A glass manufacturer pays 50 euros per megawatt hour (MWh) for its gas, to which it must add 20 euros in CO allowances2. As a result, it costs him more than consuming biogas at 65 euros per MWh. In the same way, at this level, investing in carbon capture or in hydrogen becomes interesting, not only for the industrialist, but also for financiers who choose where to invest.
Power of the price incentive
It was the combination of a resumption of industrial activity and a tightening of rules decided by the EU that caused the price to soar. The emission ceilings of the companies concerned, nearly 12,000 installations in Europe (power plants, steel industry, etc.), have been calculated to be 60% lower than their 2005 level. 55% reduction in net emissions by 2030. Market analysts expect the price to rise further. Quoted by Bloomberg, one of them sees it exceeding 150 euros at the end of 2023.
This architecture combines regulation, with the fixing of ceilings, and market law, with an increasing price for those who exceed these limits and must therefore buy additional allowances. It shows the power of the price incentive, especially if it is long term. But it raises another problem that politicians are struggling to solve: how to make this programmed increase in the cost of our energy compatible with the purchasing power of households and the competitiveness of our economy?
It is inconsistent to put in place such ambitious and essential policies and, at the same time, to want to subsidize the consumption of petrol or diesel. In the same way that we want to both protect farmers and SMEs from the predatory practices of supermarkets and ask them to lower their prices to fight against inflation. The price of things reflects the value we place on them.