UK Climate Change Programme 2006 - JNCC - Defra

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International framework for action
essential instrument in the EU’s medium and long
term strategy to tackle climate change. The UK
believes that the true potential for emissions
trading to achieve global emissions reductions will
only be delivered through the continued
international extension of the carbon market
outside Europe. Our international work on
developing the Kyoto Protocol project
mechanisms and promoting the use of emissions
trading outside the EU recognises this as a
priority.
32. Since the Kyoto Protocol was adopted, the UK
has been active in developing the detailed rules
and implementation of the project mechanisms of
the Clean Development Mechanism (CDM) and
Joint Implementation (JI). At the Montreal UN
Climate Change Conference, the UK, holding the
EU Presidency, played a key role in strengthening
CDM institutions and procedures at UN level,
establishing the framework for JI and the
timetable for the deployment and linking of UN
registry systems. Over $8m in additional funding
was agreed to fund CDM administrative activities
this year.
schemes consistent with a multilateral approach
to dealing with climate change but successful
linking will also lead to greater economic
efficiency, as cost-effectiveness and liquidity
increase with market size, and as clearer signals
for investment emerge through the establishment
of a single price of carbon across all linked
schemes. During 2005, we have continued to
exchange information with those developing
emissions trading schemes outside the EU,
including a successful event at the Montreal UN
Climate Change Conference which reviewed the
prospects for linking trading schemes and areas
such as monitoring and reporting where the use
of common standards might play a role. The
Government considers that the international
carbon market has a vital role to play in the
future of climate change policy and will continue
to prioritise further work in this area, which in
time could lead to the emergence of a global
network of linked trading schemes.
33. Through the EU Linking Directive, companies with
obligations under the EU emissions trading
scheme can now make use of credits from these
mechanisms, leading to increased investment in
overseas projects aimed at reducing emissions of
the basket of six greenhouse gases. The UK is a
leading investor country in the CDM. By the end
of February 2006, the UK was ranked second
investor country in terms of number of registered
projects with UK approval of participation. The
UK designated national authority for CDM had
issued 48 letters of approval of participation by
17 UK companies in 38 CDM projects in 11
countries. These are estimated to deliver annual
reductions of up to almost 30 million tonnes
carbon dioxide equivalent.
34. At the same time, the Government has also been
active in promoting the development of domestic
emissions trading schemes in countries outside
Europe and the potential for establishing links
between those schemes and the EU emissions
trading scheme. Not only is the linking of trading