The International Energy Agency said the EU needed to think of other ways to prevent new coal-fired power stations from being built because its carbon market would not achieve that this decade.
Nations should consider measures including bans of new and inefficient plants known as ''sub-critical,'' unless they were fitted with carbon capture and storage technology, according to Maria Van der Hoeven, the executive director of the Paris-based agency that advises 28 developed nations.
EU carbon permits, which have fallen 88 per cent since 2008, would need to trade at 10 times their current value of about €4 ($5.28) a metric ton to prompt a switch to cleaner natural gas, according to Bloomberg's calculations.
The European drive towards improved energy efficiency helped cut down permit prices, Van der Hoeven said.
Van der Hoeven said, what the IEA wanted to see was that sub critical coal-fired power plants were less in use and were not going to be constructed any more. She said, the most important thing was the need to look into the reasons beyond the collapse in the price of carbon in response to a question as to why emissions were not falling faster.
Lawmakers needed to review energy policies to make sure they did not contradict each other or overlap to cut emissions and protect the climate, According to Van der Hoeven, lawmakers needed to review energy policies to make sure they did not contradict each other or overlap to cut emissions and protect the climate.
Meanwhile, the agency said China led a rise in global carbon dioxide emissions to a record high in 2012, more than offsetting falls in the US and Europe.
Worldwide CO2 emissions were up by 1.4 per cent to 31.6 billion tonnes, the estimates of the Paris-based IEA showed.
China, the biggest emitter contributed most to the global rise, as it released additional 300 million tonnes. The gain, though was one of the lowest China had seen in a decade, as it increasingly adopted renewable sources in a bid to improve energy efficiency.
The US switch from coal to gas in power generation helped cut emissions by 200 million tone, seeing the levels fall to those of the mid-1990s.
Even with the increased use of coal in certain European countries last year due to low prices, emissions in Europe fell by 50 million tonnes because of the economic slowdown, growth in renewables, and emissions caps on industrial and power companies.