The media reported yesterday that the European Parliament has rejected an attempt to raise the costs of emitting greenhouse gases in a contentious 334-315 vote. Siding with opponents of increased energy costs, Members voted down a measure that would have temporarily cut a large surplus of carbon allowances currently being traded. The BBC reports that the price of carbon on the EU Emissions Trading Scheme has since plunged to less than 5 euros a tonne.

Given that energy prices are already significantly higher in Europe than in North America, the decision protected European manufacturers who would have been at an even greater disadvantage to their counterparts in the United States and Canada had the measure been passed. However, there is concern that the European Parliament’s decision will give ammunition to critics of carbon trading systems in other parts of the world including Canada.