European Carbon Permits Rise to Five-Month High as Natural-Gas Prices Gain

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European Union carbon permits rose to the highest in almost five months as natural gas advanced, prompting utilities to switch to burning dirtier coal for power generation.

EU allowances for December 2011 delivery rose as much as 20 cents, or 1.2 percent, to 16.02 euros ($22.38) a metric ton on London’s ICE Futures Europe exchange, its highest since Oct. 13. They were at 15.93 euros as of 8:22 a.m. local time.

Higher natural-gas prices can trigger some utilities to switch to coal to generate electricity. Coal emits twice as much carbon dioxide and so requires double the number of permits.

http://www.bloomberg.com/news/2011-03-07/european-carbon-permits-rise-to-five-month-high-as-natural-gas-prices-gain.html

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