A Critical Conversation on Climate Change ... - Green Choices

52 development dialogue september 2006 – carbon tradingInternational Climate Politics: Some Recent Highlights1990: In the wake of warnings from scientists,international support grows for requiringcountries to reduce their greenhousegas emissions to mitigate globalwarming. The US is opposed.1991: The UN Conference on Trade andDevelopment sets up a department ongreenhouse gas emissions trading.1992: The Rio de Janeiro Earth Summitproduces the United Nations FrameworkConvention on Climate Change( UNFCCC) to prevent ‘dangerous anthropogenicinterference with the Earth’sclimate system’. The UNFCCC suggests,but does not require, that emissions in2000 not exceed 1990 levels.1994: The UNFCCC enters into force,signed by 153 countries. The Alliance ofSmall Island States, in an attempt to holdsea-level rise to 20 centimetres, demandsthat emissions be cut to 80 per cent of currentlevels by 2005. The US and its alliesreject the idea of cuts, saying that it wouldbe cheaper for them to be allowed to buypermits to pollute in an emissions market.Most EU nations, believing they alreadyhave cost-effective means for domestic reductions,portray the US proposal as an attemptto shirk responsibility.1996: US proposals to avoid reductions bybuying permits from abroad and borrowingagainst future emissions continue to becondemned by the EU, G-77 nations andmost NGOs.1997: The Kyoto Protocol is adopted,binding industrialised countries to limitemissions to approximately 95 per centof 1990 levels by 2008-2012. But Northernpressure, especially from the US, opensloopholes that allow the target to be metpartly by global trading in emissions allowancesand carbon project credits, aswell as growth of domestic forest cover.1998: Increasingly worried about the costsof domestic emissions reductions and, inthe face of industry pressure, unable tomake enough progress on common regulatorypolicies and taxes, 81 the EU beginsto develop an internal emissions tradingscheme. But it insists on limits to globalcarbon trading, demanding that permitsbought in from abroad be used to meetno more than 50 per cent of any country’semissions targets. The US opposesany limits on global trading and threatensto form a pact with Canada, Japan, Australiaand New Zealand to meet all emissionstargets by buying meaningless Russiancredits created by the use of 1990 (beforethe post-Soviet economic collapse) asa ‘baseline year’.1999: The World Bank sets up a PrototypeCarbon Fund (PCF) to generatecheap credits from Southern carbonsavingprojects that can ‘reduce the costsof emissions reductions for industrialisedcountries’. 82 The PCF quickly attracts investmentfrom Mitsubishi, BP, and othercompanies, as well as several governments.The International Emissions TradingAssociation, a corporate lobby group,is established through the cooperation ofUNCTAD and the World Business Councilfor Sustainable Development. 832000: The EU rejects a compromise thatwould have allowed the US limited creditsfor its own forest carbon sinks, allowed