EU states join global carbon market embryo
A small number of European states have joined up with US and Canadian regional cap-and-trade initiatives to share information about emissions trading systems. The new group hopes to act as a driver for the creation of a wider, international carbon market in advance of key UN climate negotiations in Bali.
Following a 29 October meeting in Lisbon, representatives from seven EU member states, nine US states, two Canadian provinces plus New Zealand and Norway announced the creation of the International Climate Action Partnership (ICAP). The European Commission is also a member of ICAP.
France, Germany, the UK, Italy, the Netherlands, Ireland and Portugal are the only EU member states to take part in the initiative.
EU Environment Commissioner Stavros Dimas hailed ICAP as a sign that "an increasing number of countries and regions around the world have put in place a carbon market or will do so soon and that it is time for others to join us in credible and stringent efforts to combat climate change."
The Commission, which yesterday announced a 2.08 billion tonne CO2 cap for the 2008-2012 trading period of the EU Emissions Trading Scheme (EU ETS), is hoping that the 3-14 December UN climate negotiations in Bali will prove to be the first step towards an eventual global emissions trading scheme to replace the Kyoto Protocol in 2013. EU member states will adopt today (30 October) in Lisbon their conclusions on the EU's objectives for the Bali meeting.
ICAP's main tasks will be to monitor and exchange information about international carbon trading systems, providing a basis for the eventual coordination of a wider, global system in which different cap-and-trade mechanisms are linked together.
"Linking current and emerging carbon markets at a global level establishes a level playing field for covered sectors and a consistent regulatory framework across national borders. Through this sharing, ICAP enhances the design of other market-based schemes by ensuring compatibility of design issues at an early stage", according to the ICAP website.
The EU's Advisory Group on Energy and Climate, established in March 2007, also met on 29 October to discuss the Bali meeting. In comments made before the meeting, EU Commission President José Manuel Barroso reaffirmed the EU's existing 20% CO2 reduction commitments, saying that the EU is "ready to go further, to a 30% reduction, if there is a fair and effective global agreement for the post 2012 period".