Carbon trading markets emerging in developed countries are unlikely to succeed in reducing greenhouse gas emissions to required targets in their current form, according to a report co-authored by former UK Prime Minister Tony Blair. The report also says the UN’s project-by-project approach to emissions reductions in developing countries under the CDM is too little and too slow to meet the challenge of curbing emissions growth in these often fast-growing nations.
The Review of Carbon Markets is one of a series of 14 briefing papers published under the ‘Breaking the Climate Deadlock’ initiative of Blair’s and NGO, The Climate Group. The papers add more detail to a document put out in advance of the recent G8 summit in Japan where Blair outlined ten core areas of climate change response for progress.
The authors say the aim is to build decisive political support for a post-2012 international climate change agreement at the UN Climate Change Conference in Copenhagen in late 2009.
Such a comprehensive agreement is needed to ensure carbon markets fulfil their potential, the paper says. While acceptance of the CDM’s international carbon instrument, the CER, helps link markets, a truly global carbon market of open domestic schemes is needed to secure the scale of cuts in emissions required. The current piecemeal approach under a variety of domestic scheme types won’t create the depth, breadth, liquidity and transparency needed to make them fully effective, the authors argue.
“The ‘sum of the parts’ of the carbon markets today may not deliver the deep cuts in emissions that are required,” the report states. “Many domestic emissions trading schemes have self-protection features that mean they are not as open or international as the architects of Kyoto had in mind, or as many experts in the field would recommend.”
Schemes must be better integrated with globally consistent rules and trading instruments, the authors say. They also recommend new international reduction measures targeting key emitting sectors across developing economies, the so-called sectoral approach, to complement the CDM.
The report also warns that, no matter how successfully emissions trading schemes are implemented and integrated, carbon pricing won’t throw up all the technologies and strategies that will be needed to fight climate change. More targeted measures will be needed to deliver a full sustainable development agenda.
The report’s recommendations make calls for leaders this year to agree on, or strongly signal, long term targets to 2050 and a credible trajectory to achieving them, and by the end of 2009 agree mid-term targets for industrialised countries and the mechanisms to achieve them.
Other papers in the series include work on energy efficiency, sectoral agreements, biofuels, nuclear power and climate change adaptation. The Climate Group has scheduled a set of international seminars on the papers over the web for September.
Downloads
Review of Carbon Markets [PDF 23 pgs]
Breaking the Climate Deadlock briefing papers