Carbon prices have fallen to a record low after MEPs voted against proposals to backload the auctioning of carbon allowances, the international press reports.
The Irish Times says that the rejection of the proposal, which was defeated by just 19 votes, was seen as a major blow to the credibility of the European emissions trading system (ETS), the world's largest carbon market.
According to the paper, carbon prices dropped by about 40 per cent to €2.63 a tonne immediately after the vote yesterday, though recovered to over €3 by early afternoon.
The FT says the outcome confirmed a reality that had been dawning on politicians and policymakers across Europe well before the ballot.
It added that climate change, which once sat at the top of the bloc's agenda, has increasingly been trumped by concerns about jobs and growth in an economy suffering a lingering debt crisis.
Parliament's environment committee said that some members felt that "a rise in the carbon price would erode the competitiveness of European industry and be passed on in household energy bills", according to the Wall Street Journal.
Elsewhere, Deutsche Welle says that European climate action commissioner Connie Hedegaard was disappointed by the vote, with the Danish official saying, "Europe needs a robust carbon market to meet our climate targets and spur innovation.
"We will now reflect on the next steps to ensure that Europe has a strong EU ETS … the market, the investors and our international partners are all awaiting," she added.