A committee of UK parliamentarians has warned that the government’s planned top-up tax on emissions allowances could have a “devastating effect” on industry.

Carbon market participants have shrugged off an eagerly awaited report by the European Investment Bank (EIB) into the first month of its 300 million EU allowance (EUA) sale programme, which many had feared had contributed to collapsing carbon prices.

Leading analysts have slashed their carbon price forecasts compared to this time last year, although all are anticipating that prices in the EU Emissions Trading System (ETS) will recover strongly from their historic lows.

The European Court of Justice (ECJ) ruled on Wednesday that the inclusion of aviation in the EU Emissions Trading System (ETS) does not violate international law. This decision paves the way for all aircraft taking off or landing at an EU airport from 1 January 2012 to pay for the greenhouse gases they emit.

The European Parliament’s environment committee has voted to cut the supply of EU carbon allowances, causing the carbon price to climb as high as €9.75, a 32% increase on yesterday’s close.

Some of Europe’s biggest energy and manufacturing companies have called for a strengthening of the EU Emissions Trading System (ETS), in the wake of the release of the European Commission’s energy roadmap and ahead of a key vote on the EU Energy Efficiency Directive (EED).

Deutsche Bank has torn up its carbon pricing methodology and slashed its price forecasts, on the expectation that there will be no need for any abatement to meet current EU emissions targets, as the bloc’s economic woes continue.

With the price of carbon in the EU Emissions Trading System (ETS) crashing to a record low today, the European Parliament’s environment committee has proposed measures to cut the supply EU carbon allowances set to flood the market.

Growing fears about the EU’s economy have prompted a new wave of downgrades of carbon price forecasts – but a prediction by UBS that prices could slump to €3 ($4.06) next year has elicited a rebuttal from a leading carbon market group.

Six US states have now entirely dropped out of the Western Climate Initiative (WCI), leaving California as the only participating US state.

The passage by the Australian Senate of carbon pricing legislation on Tuesday marks the creation of the second largest carbon market after the EU’s and gives a fillip to the international climate talks.

German insurance giant Allianz has invested an undisclosed sum in Wildlife Works Carbon, a US-based developer of projects that reduce emissions from deforestation and forest degradation (REDD).

Paul Kelly, CEO of emissions reduction project developer EcoSecurities, has returned to investment bank JP Morgan less than two years after he took up the post.

The inclusion of aviation in the EU Emissions Trading System (ETS) does not violate international law, said an aide to the European Court of Justice (ECJ) – paving the way for the court to rule against a legal challenge to the plan, and boosting confidence in the trading programme.

The European Commission has published benchmarks to calculate how many free carbon allowances individual airlines will receive when they become subject to the EU Emissions Trading System (ETS) from 1 January 2012.

Carbon allowances should cost at least €40 ($54.57) each, according to the long-term fundamentals of the EU Emissions Trading System (ETS), says analysis firm Bloomberg New Energy Finance (BNEF).

Successful carbon cap-and-trade programmes in China and California are likely to be necessary preconditions of any US national market in greenhouse gas emissions, according to market pioneer Richard Sandor.

The Ecuadorian government is hoping to sell 13.5 million certified emission reductions (CERs) from its controversial Coca Codo giant hydro project, but attempts to find buyers have fizzled out.

Volumes in the global carbon market fell 3% in the second quarter of 2011, with a late surge in volumes in the EU Emissions Trading System (ETS) insufficient to offset a drop in other carbon markets, according to an analysis firm.

The UK’s carbon price ‘top up’ will encourage utilities to raise electricity prices, increasing their profits by £7 billion ($11 billion), according to a report by investment bank Credit Suisse.