The death of cap and trade?

FT.com headline: EU carbon prices plummet as emissions fall.

If the CO2 cap and trade pseudo-market fails - and it very well may - the only thing left will be regulation by brute force.

UPDATE/BUMPED: E.P.A. Expected to Regulate Carbon Dioxide

Even some who favor an aggressive approach to climate change said they were wary of the agency’s asserting exclusive authority over carbon emissions. They say that the Clean Air Act, now more than 40 years old, was not designed to regulate ubiquitous substances like carbon dioxide. Using the law, they say, would capture carbon emissions from new facilities, but not existing ones, blunting its impact. They also believe that a broader approach that addresses all sectors of the economy and that is fully debated in Congress would be better than a regulatory approach that could drag through the courts for years. [snip]

Many environmental advocates, however, said the E.P.A.’s action was long overdue, but added that it was only as a stopgap until Congress passed comprehensive climate change legislation.

Hold your breath.

UPDATE: Marc Stuart's Cleantech Blog post on carbon taxes is a must-read.

Bottom line is if you want any kind of emissions mitigation in the developing world, you better hope for some kind of price recovery in the carbon market. And soon.“Cratering the Carbon Market - The Sequel “- will of course give critics of emission trading another opportunity to trot out their arguments that trading doesn’t work and the only way to control emissions properly is via a tax.

Hold your wallet. Wall Street Journal has more.

MORE: Even Kyoto can't handle Kyoto.