EU faces carbon crunch decision

A leading group of European businesses has written an open letter to European Commission president José Manuel Barroso, urging him to reduce the carbon emission caps asked for by EU governments by more than 10 per cent.

European Carbon Investors and Services (Ecis), a group of 13 investment banks, including ABN Amro, Barclays Capital and Deutsche Bank, as well as the carbon emissions exchange Climate Change Capital and four other businesses, have told Mr Barroso that the limits requested by EU states are too high.

On Wednesday, Mr Barroso will chair a Commission meeting on the amount of carbon emissions member states' industries should be allowed between 2008 and 2012. Ecis said a lack of meaningful data prevented the last round of negotiations from producing useful limits

"Now there is adequate data ... the Commission must stand firm, despite political pressure from its member states to back off," a spokesman for Ecis said. "This will help create a realistic price for carbon which will be sufficient to reward investors in clean technologies."