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EU Cap-and-Trade Hasn't Given Price Signal, Investor Poll Says
2010-09-30 05:00:00.0 GMT
By Alex Morales
Sept. 30 (Bloomberg) -- The European Union's carbon trading
system hasn't provided the needed long-term price signal for
investors to switch away from carbon-intensive technologies, the
Institutional Investors Group on Climate Change said.
A survey of more than 40 investors including property,
carbon, infrastructure and pension funds found that fewer than
10 percent of respondents said the EU Emissions Trading System
had provided a strong enough price incentive to switch from
carbon-intensive technologies, and none said the EU-ETS had
provided long-term price certainty, the group said today.
The group, with 60 members managing about 5 trillion euros
($6 trillion) of assets, said the EU should decide quickly
whether the 27-nation bloc will raise its emissions target for
2020 to a 30 percent cut from 1990 levels from 20 percent. It
also called for long-term plans for emissions trading and more
durable support for renewable energy in member states.
The bloc should "provide clarity on the EU-ETS out to 2030
in order to be consistent with the investment cycles of large
renewable energy and energy infrastructure assets," the group
said in an e-mailed statement. "The EU ETS will only support a
shift into low-carbon investment if it provides investors with
strong price signals over a significant period of time."
The survey also showed that 90 percent of asset managers
are deterred from making investments in renewable energy by
retrospective policy changes and the absence of grandfathering
guarantees in some member states. Grandfathering is where new
rules aren't applied to old projects.
While the group didn't name specific policies in member
states as a concern, countries including Spain and France have
made or are planning changes to existing subsidies for solar
power, having previously said those incentives would be in place
for longer.
Companies that took part in the survey include APG Asset
Management, Henderson Global Investors, HgCapital and F&C Asset
Management Plc.
For Related News and Information:
More climate-change news: NI CLIMATE <GO>
Top environment, renewable energy page: GREEN <GO>
Most-read environmental news: MNI ENV <GO>
--Editors: Randall Hackley, Todd White
To contact the reporter on this story:
Alex Morales in London at +44-20-7330-7718 or
amorales2@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net
