carbon action

COP 15 is the culmination of over two years of negotiations and hard work where different societies have tried to come up with a successor to Kyoto. We have about a month before Copenhagen and most nations are concentrating on solutions to the climate challenge, others contemplate a failure in Copenhagen and are thinking of alternative tactics.

One possibility mentioned in Europe is the introduction of ‘carbon tariffs’ on imports to the EU. The EU emission trading scheme requires organisations to account for each tonne of CO2 emitted. The ETS leads to rising production costs for firms who are obliged to comply - this is a good thing where all firms face the same obligations. It is not so good if it can introduce competitive issues where European companies are in competition with companies from areas which do not operate emission trading or environmental protection measures.

Some argue that in order to protect European companies from growing and what is perceived as unfair competitive pressure, additional taxation (or border tariffs) of goods from countries that have no climate protection measures should be introduced.

If the EU imposes carbon taxes on products from developing countries for environmental reasons, governments in other countries may introduce similar measures. This is one possible scenario.  We will return to this subject over the next few weeks with other possible outcomes to a failure at Copenhagen; however we believe a successor to Kyoto will emerge if not in December – then shortly afterwards, as not taking action is not really an option for us.

On a practical level regarding emission controls and carbon trading initiatives, we cannot yet align the EU ETS with similar systems in other countries - one tool to help with this is the global ISO 14064 standard - at least we can then be sure that we are all quantifying carbon using the same yardstick or benchmark. The beauty and applicability of ISO 14064 is that it is program or regime neutral and can be used to manage emissions in any jurisdiction. It is a global solution for a global issue. 

In its current state, cap-and-trade schemes to reduce emissions are said to be far from being fair and effective; a major improvement would include establishing a Central Climate Bank to register and supervise the transfer of emissions credits using ISO 14064 as the transaction assurance tool . This bank would also ensure that emissions trading did not run counter to the goal of remaining within an agreed global carbon budget, for example via the complete sale of unused emissions credits by individual developing countries at the beginning of the contract period.

In order to achieve this, the Central Climate Bank must have the power to do its job. This power can only come from the UN via the framework convention on climate change.