Indeed, Germany subsidises new coal plants by granting them extra permits under the European Union's emissions trading scheme.
But in practice many utilities are betting that the disparity in fuel prices will outweigh the cost of extra permits to pollute.
If that happened, the straitjacket would be loosened, and extra permits would be sold until the end of the compliance period.
This was done through issuing generators and energy-intensive companies with a set quota of emissions permits, requiring them to buy extra permits if they needed to emit more than their allowance.
Because some companies can rein in their emissions more easily or at less cost than other businesses, they can profit by selling extra permits through the market to companies that find the cost of pollution-control technology prohibitive.
Under the cap-and-trade system preferred by Democratic leaders and the Obama administration, companies that cannot meet their greenhouse gas pollution limit could buy extra permits by investing in carbon-reduction programs abroad.
If one unit head saw a way to exceed her reduction target, for instance, she could sell her extra permits to other business units that were having trouble meeting their targets.
But green lobbyists argued that the number of permits had to be fixed if the bill was to have predictable environmental benefits; they doubt the ability of politicians to keep their nerve.The bill attempts to compromise by allowing the government to issue extra permits, but only by borrowing from the stock allocated for future years.
But at the very least it is likely to raise the prices of electricity, natural gas and petrol, as energy firms pass on the expense of buying permits to their customers a ticklish prospect at a time when voters are already enraged by rising energy prices.Industrialists had hoped for a "safety valve", whereby the government could sell unlimited extra permits if they got too pricey.
(However, EU operators using a vessel not flagged in the EU probably could get extra permits).
Specifically, RTCC reports that with this approach "companies that emitted more than 120percentt of the level covered by the free permits could seek extra permits, while those which emitted less than 80percentt of their allocation may have permits withdrawn".
