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New Carbon Markets May Pose 'Serious Challenge' to UN Program
2010-09-08 10:32:27.535 GMT
By Natalie Obiko Pearson
Sept. 8 (Bloomberg) -- The lack of progress on climate
talks may prompt nations to consider new programs posing a
"serious challenge" to the world's second-largest emissions
market, a top envoy at the United Nations said.
Fragmentation of the UN-overseen Clean Development Mechanism
"is maybe unavoidable, but it's not a scenario to which we look
forward," chief climate negotiator Christiana Figueres told a
conference in New Delhi.
The Clean Development Mechanism, established under the 1997
Kyoto Protocol, awards credits known as offsets to projects that
lower emissions in developing nations. Negotiators failed at
climate talks in Copenhagen last year to extend or replace the
treaty, raising questions about how and whether the CDM would
operate after 2012.
Countries could negotiate a continuation of trading
independent of the Kyoto Protocol, or create an entirely new
market that may not be administered by the UN, Figueres said.
"The Clean Development Mechanism does not necessarily have
to be restricted to the Kyoto Protocol," she told reporters at
the conference. "Some other market, whatever they want to call
it," could be part of a broader agreement between governments.
New Zealand introduced a carbon emissions trading system in
July, while China and Taiwan are among countries considering
introducing domestic cap-and-trade systems. Japan may boost
financing for overseas projects as it seeks carbon-offsetting
accords with Asian nations including India, Indonesia and
Vietnam, Takashi Hongo, head of the Japan Bank for International
Cooperation's environment finance engineering section, said in
an interview this week.
'Standards of Comparability'
Carbon markets allow companies to buy and sell credits
representing reductions in emissions of greenhouse gases such as
carbon dioxide. If countries begin developing independent
systems, there needs to be a way to verify that credits are
comparable in different countries, Figueres said.
"The market and the secretariat would have to move very
quickly to provide for certain standards of comparability that
would allow the different markets to be able to work in a
consonant manner with each other," she said.
China and India are the biggest generators of UN credits,
which can be used to comply with pollution targets in the EU
emissions trading system, the world's largest cap-and-trade
program.
Such trades cannot be the only way of financing emission
reductions in developing countries, Figueres said.
"That will simply not be enough," she said.
"Industrialized countries must agree to financial vehicles that
are not offset-based."
For Related News and Information:
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Top renewable-energy news: GREEN <GO>
Most-read alternative energy stories: MNI ALTNRG <GO>
New Energy Finance top news: TNEF <GO>
Renewable energy, environment page: GREEN <GO>
--Editors: Mike Anderson, Randall Hackley.
To contact the reporter on this story:
Natalie Obiko Pearson in Mumbai at +91-22-6612-9107 or
npearson7@bloomberg.net.
To contact the editor responsible for this story:
Clyde Russell at +65-6311-2423 or crussell7@bloomberg.net.
