Despite comments made on a United Kingdom government web site that "[t]he UK Government takes its role in the field of climate change very seriously, and to this end its has instituted a Climate Change Programme to deliver the UK's Kyoto Protocol target", it has endeavored and succeeded in rendering its annual emissions targets legally flexible and modifiable. And that seems at odds with the position the United Kingdom seeks to impose on the US government.
The United Kingdom sought the annulment of a Commission decision that refused to allow an increase the greenhouse gases which the United Kingdom could emit. And it won in the Court of First Instance - see the judgment in Case T-178/05 United Kingdom v. Commission.
Directive 2003/87/EC of the European Parliament and of the Council of October 13th, 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC sets up a Community scheme for greenhouse gas emission allowance trading in order to reduce such emissions. Each Member State must develop a national plan for the allocation of greenhouse gas emission allowances (‘NAP’), in accordance with certain criteria set out in the directive. The NAP must state the total quantity of allowances that the Member State intends to allocate and how it proposes to allocate them. The first NAP, for the three-year period beginning on January 1st, 2005, had to be published and notified to the Commission by March 31st 2004 at the latest. Under the directive, the Commission has three months to reject a NAP, in whole or in part, if it is incompatible with the criteria laid down by the directive. All amendments made to the NAP by the member State must be approved by the Commission.
The United Kingdom submitted its NAP, the Commission Okayed it and then the United Kingdom had second thoughts and wanted to increase the total quantity of its emissions. The Commission took a decision which stated that the United Kingdom could not do that : Once the NAP was approved, its quantities were fixed for the relevant period so that emission trading could take place.
The Court of First Instance held that the Commission could not restrict a Member State’s right to propose amendments, even if they increase the total quantities of greenhouse gas emissions.
But if the total quantities can increase during the course of a trading period, the value of the licenses should go down, right ? And why buy an allowance on the market when political patronage can get you an extra quantity when you may need it ?