LONDON - Prices for benchmark European Union carbon emission permits fell 2 percent on Friday, as traders viewed the previous session's gains as short-lived.

EU Allowances for December delivery were down 26 cents or 2.01 percent at 12.67 euros ($18.91) a tonne at 0747 GMT, with light volume at 340 lots.

News this week that the United States and China both tabled emission targets boosted prices on Thursday, while other commodities prices fell.

That boost was short-lived and now we are back with the fundamentals. It was a bit of a dead cat bounce, an emissions trader said.

Falling oil on Friday was not supporting carbon prices. U.S. crude for January delivery extended losses to $74 a barrel on Friday, as nervous investors, roiled by debt problems in Dubai, pared positions and shifted to safe-haven assets.

Firmer German spot power prices are seen early next week when less wind power and steady temperatures are forecast, which could prevent EUAs from testing the 12.50 level, traders said.

German Calendar 2010 baseload power traded at 44.50 euros per megawatt hour.

Certified emissions reductions were slow to trade.

Australia's parliament delayed a final vote on a government carbon trade plan on Friday, missing a key deadline, throwing Prime Minister Kevin Rudd's climate change policy into doubt and raising the possibility of a snap election.

(Reporting by Nina Chestney; editing by James Jukwey)