Tuesday 4 August 2020

EU looks east for partners in carbon markets

Brussels, May 3, 2011

The European Union is making progress towards building a global carbon market with countries in Asia to curb greenhouse gas emissions, the EU's climate chief said on Tuesday at the start of a visit to South Korea.

"We are working closely with everyone who tries to introduce these kind of schemes," EU climate commissioner Connie Hedegaard told Reuters in a telephone interview.

The European Union began the world's largest cap-and-trade market for greenhouse gases in 2005, capping emissions from some 11,000 power stations and industrial plants in 30 countries.

Despite numerous teething problems, the scheme has so far contributed to bringing EU emissions to 17 percent below its 1990 baseline, and the EU argues it is the most cost-effective instrument in the world's climate toolbox.

South Korea unveiled a draft plan for a carbon emissions trading scheme last month, and the government aims to get the market running between 2013 and 2015.

"It's my very clear impression they're moving on with this," said Hedegaard. "They realise it is of mutual interest to be sure that the Korean system and the European system are linkable. We already had a team here in March. We are continuing that expert work with the Koreans."

She added, "Our counterparts recognise that all the experience Europe has gained for good and for worse, what to do, but also what not to do ... can be used so that others can move to the right solutions."


Such problems have included the massive over-allocation of carbon permits in the first years of the EU scheme, which caused their market value to crash, and in recent months lax security has allowed a number of cyber-attacks that forced the scheme's temporary closure.

Heavy industry has also put up strong opposition to the added costs of carbon permits, both in the EU and countries such as Australia and South Korea that are considering such schemes.

"My argument is that it's always better to be in the hands of a market-based system than in the hands of politicians increasing (environmental) taxes," said Hedegaard. "With a market, you are always sure that the environment will see part of the benefit."

Australia's government, which has a one seat majority, wants a new carbon tax to start in July 2012, with a move to an emissions trading scheme three to five years later, in order to curb emissions.

But opposition to the tax has swollen to almost 60 percent of voters, according to a recent poll, with major food retailers, miners, energy and agriculture firms writing to the prime minister to criticise the tax.

Hedegaard said EU experts were coordinating with their counterparts in Australia and that good progress had been made with China.

China plans to launch pilot emissions trading schemes in six provinces before 2013 and set up a nationwide trading platform by 2015, officials say.

"Last week, I had a three-hour-long bilateral with minister Xie (Zhenhua) from China," said Hedegaard, referring to Beijing's top climate official.

"He confirmed China's willingness that we could work with them on some of their pilot projects on cap-and-trade in some of their very big cities and some of their very big provinces.” – Reuters

Tags: EU | Europe | Brussels | Asia | Caron |

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