The European Parliament voted Wednesday in favor of revamping its carbon-trading program, approving a proposal intended to restore financial incentives for shifting away from fossil fuels and towards renewable energy.

Members of the parliament in Strasbourg voted in favor of delaying the auction of 900 million emissions permits, with the intention of reducing an oversupply.

The proposal is hoped to lift the cost of emitting carbon dioxide in Europe , following a collapse in prices on the Emissions Trading System because of a sharp drop in demand for electricity during the economic downturn.

The parliament rejected similar proposals in April, causing the price of emitting one ton of carbon dioxide to fall to below EUR3 ($4), compared with nearly EUR30 in 2008. Most experts say EUR3 a ton is too low a price to provide a good incentive for companies to invest in clean energy.

The original proposal rejected in April was for the auction of 900 million allowances, out of a total surplus of around 1.7 billion, to be delayed to between 2019 and 2020. The compromise version approved Wednesday allows those permits to be reintroduced within a year of being removed.

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