Seeking a new global deal on climate change

The European Commission (EC) has released a paper outlining its position on climate change ahead of international climate talks. According to the paper, they foresee a major role for carbon trading in efforts to tackle climate change. The commission says the costs of containing global warming are likely to increase rapidly in years to come – adding 175 billion Euro to the cost the world must assume by 2020. More than half that amount, they say, will be needed in developing countries like China and India. The paper presents various options for increasing international funding – including requiring countries to contribute according to their income and level of emissions. Another option would be to auction some emission allowances on a carbon market.

The paper also says that the European Union and other economic powers should help defray the costs of reducing greenhouse gases emitted by developing nations. All developing nations, except the very poorest, would be required to limit growth in emissions by adopting development strategies that produce fewer greenhouse gases. These strategies should include stopping (or at least slowing) tropical deforestation, as trees and plants absorb carbon dioxide.

The EU is also keen to build on the steps it has already taken to stimulate others at talks in Copenhagen scheduled for December of this year. The United Nations 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. And so 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 seeks to build a global carbon market. And they already have a head start, after introducing the EU carbon market (called the EU Greenhouse Gas Emissions Trading Scheme) back in 2005. A growing number of countries are looking to follow suit, including the US, New Zealand and Australia. The scheme caps overall CO2 emissions, but allows businesses to buy and sell credits amongst themselves.

The paper notes that as some climate change is inevitable, it hopes the Copenhagen agreement will also provide a framework to help countries adapt. For example, they state that it should ensure support for poor nations vulnerable to extreme weather such as drought, storms and floods.

Much will be happening in the months between now and December, but the hope is that there will be a plan that moves the debate a large step forward. What role the US plays in this discussion remains to be seen.