Market fears two-tier EU ETS post-2012
Following a lack of collective will to determine a binding agreement at the Climate Change conference in Copenhagen (Cop15), analysts say the West may take steps to either ban or restrict most Chinese certified emissions reduction (CER) credits in the European emissions trading scheme (EU ETS) and create a two-tier trading system, as much of the blame for the de-railing of the Copenhagen talks has been put firmly at the door of China.
Analysts warn that a possible two-tier EU ETS could emerge, as the West may take a direct or indirect punitive stance on China's clean development mechanism project (CDM) generated certified emissions reduction (CER) credits, and make this ineligible for use in Phase III (2012–2030).
"China is no doubt the largest issuer of CERs in the market, and some of its largest projects may be objected to by the EU in the future," said Emmanuel Fages, head of market analysis at French emissions trading
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