Bulgarian CO2 permits

The UN will suspend Bulgaria as of June 30 from trading emission permits under the Kyoto Protocol, and hence in the EU ETS. The reason is that its accounts are intransparent and untrustworthy. See here and here.

This is good news and bad.

The good news is that the problem seems to be incompetence rather than dishonesty. If organized crime had taken over Bulgaria permit accounts, I would expect that they would not be caught out by maternity leave.

The bad news is that the suspension is not immediate. In the EU ETS, permits trade under “seller beware” liability. That is, if an Irish company buys a dodgy permit from Bulgaria, that is Bulgaria’s problem. Bulgarian companies have thus been given six weeks to sell permits, knowing that their government will not be able to verify their accounts.