EU foresees major role for carbon trading in efforts to tackle climate change.
In a paper outlining its position ahead of international climate talks, the commission says the costs of containing global warming are likely to soar in years to come – adding €175bn to the world's annual bill by 2020. More than half that amount will be needed in developing countries like China and India.
The EU and other economic powers should help defray the costs of reducing greenhouse gases emitted by developing nations.
The paper presents various options for increasing international funding – including requiring countries to contribute according to their incomeand level of emissions. Another option would be toauction some emission allowances on a carbon market.
In return, all developing nations – except the very poorest – should limit growth in emissions by adopting development strategies that produce fewer greenhouse gases. These strategies should include curbing tropical deforestation, as trees and plants absorb carbon dioxide.
The EU has already taken bold action of its own to tackle climate change, taking steps to scale back emissions. Now it is keen to build on that success at the talks in Copenhagen in December. The UN is organising the conference for the purpose of securing a new and more ambitious global commitment to tackling climate change. The current treaty – the Kyoto Protocol – expires at the end of 2012.
The EU will urge developed countries to commit to an overall 30% reduction in greenhouse gas emissions by 2020 (compared with 1990 levels). The contribution would vary by country, depending on income, population, level of emissions and past efforts to reduce emissions. Compliance should be monitored and enforced.
The commission also foresees a major role for emissions trading, and will seek to build a global carbon market. A growing number of countries including the US, New Zealand and Australia are looking to set up schemes similar to the; EU carbon market introduced in 2005. The scheme caps overall CO2 emissions, but allows businesses to buy and sell credits amongst themselves.
As some climate change is inevitable, the Copenhagen agreement should also provide a framework to help countries adapt. And it should ensure support for poor nations vulnerable to extreme weather such as drought, storms and floods.
The commission’s proposals, tabled on 28 January, will be discussed by European leaders and lawmakers in the months to come.