The European Union's executive body is considering how to strengthen the bloc's carbon market, the Commissioner for Climate Change said Tuesday, in a sign that the debate on how to boost carbon dioxide prices is catching the attention of the highest policy makers in the EU.

"To preserve this truly European and cost effective policy tool we have to consider and we are considering how to strengthen the ETS," Connie Hedegaard told a conference.

The ETS, or Emissions Trading System, is the EU's flagship tool to fight climate change by putting a price on carbon-dioxide emissions and capping their quantity. The idea of the market for CO2 is that companies would prefer to invest in long-term green technologies rather than buying permits to emit CO2. The higher the price of permits, the stronger the incentive.

But prices on the market have hit record lows in recent months, raising questions about its effectiveness in triggering long-term investments in clean technologies to reduce greenhouse-gas emissions.

This has spurred a debate on how to reinforce the incentive the ETS is supposed to offer in encouraging investments in clean technologies, but Europe 's present economic and financial struggle has been preventing the commission from making concrete proposals.

Many countries see a higher carbon price as a cost for their industries. And starting in 2013, companies will have to buy more permits that they now get for free.

One solution would be to remove some allowances from the market to create a shortage, a measure called set-aside, an initiative strongly backed by the environment committee of the European Parliament in December.

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