EU lawmakers seek to beef up cap-and-trade system

(AP) European lawmakers are proposing to tighten the bloc's cap-and-trade system to make carbon dioxide pollution more expensive.

The European Parliament's environment committee voted in favor of a change Tuesday that would allow the EU Commission, the bloc's executive arm, to tighten the supply of pollution rights.

The price for the emission allowances has dropped significantly since their introduction amid lower-than-expected demand as the European debt crisis took its toll on the economy, thus slashing a financial incentive for companies to invest in low-carbon technologies.

The committee's decision needs to clear another parliamentary hurdle next week, with the EU's 27 governments then possibly deciding on it in March.

Environmentalists say reform is the only way to save the cap-and-trade system, but industry groups reject the proposed changes as political maneuvering.