Copenhagen Climate Treaty & Climategate

Carbon Market Players Say Open to Self-policing

May 31, 2010

Reuters - Carbon market players said on Tuesday they will consider developing self-policing rules after a call to action by the U.N.'s new climate chief, but warned that more political will is needed by governments to spur investment.

Christiana Figueres, who officially starts her new role in July, on Friday said market participants had "seriously impaired the trust of governments, civil society and non-profits," through several scandals that rocked the largely unregulated $144 billion market last year.

"I believe that if the private sector itself does not develop self-policing mechanisms, somebody else will step in and do it for you," she told a carbon conference in Germany.

The Carbon Market & Investors Association, one of three trade groups identified by Figueres, said it would consider Figueres' proposition, CMIA director Miles Austin told Reuters.

Last year, the market's reputation was rattled by allegations of carbon credit theft, tax fraud and trade in recycled credits.

"We cannot aspire to more advanced financial mechanisms ... if current transactions are not squeaky clean," Figueres said.

"Market participants need to hold themselves to a higher standard. This market needs public trust ... without it, it does not function."

Figueres, speaking in her first public appearance since being appointed on May 17, said the market also faced criticism for not contributing to sustainable development or improving the quality of life for families in developing countries.

Through one market scheme under the Kyoto Protocol, companies can invest in clean energy projects in poor nations and in return get carbon credits which can be sold for profit.

But administrative delays, along with the global economic slowdown, caused the scheme, called the Clean Development Mechanism, to fund only half as many emissions cuts last year than in 2008.

Figueres said the firms that audit the emissions cuts made by projects needed to "staff up" in order to cut delay times.

She also said companies need to invest in more projects that widely distribute green technology like efficient light bulbs and clean-burning stoves to large numbers of poor families.

"Investments are in place and those investments are at risk, meaning the private sector cannot sit on the bench and wait for others to solve the problem," Figueres said.

CMIA's Austin said private sector funding will not flow without more regulatory certainty for investors.

"Of the $100 billion proposed annually by 2020, according to EU figures, $66 billion is supposed to be coming from the private sector. That won't happen in the absence of political will, so there needs to be realism on both sides," he said.

UN climate talks to agree a climate pact to succeed Kyoto resumed on Monday, exposing familiar rifts between rich and poor nations which delegates said would delay the start of formal negotiations.

Talks have yielded little progress to date as nations have for years squabbled over who should take responsibility for leading the global effort to curb greenhouse gases.

Figueres said she was confident carbon trading will continue post-2012, the year Kyoto's first leg expires, but warned that future markets are likely to be more complex and fragmented, and should not be taken for granted.

"The harsh reality is there is no entitlement to the carbon market because it stems from a political agreement that is still in the making," she said.

Rich-Poor Rifts Stall Progress at U.N. Climate Talks in Bonn

May 31, 2010

Reuters - U.N. climate talks opened on Monday, exposing familiar rifts between rich and poor countries which delegates said were likely to delay a re-start of formal negotiations.

The 185-nation Bonn conference, which will run until June 11, is the biggest international meeting on climate change since a summit last December in Copenhagen failed to agree a new pact.

Several countries said they could not give a green light to formal negotiations on a new text published in mid-May and which outlines a huge range of options for fighting climate change.

The Copenhagen summit last year struggled to overcome suspicion on how to share global effort to curb greenhouse gases under a new deal to succeed the Kyoto Protocol after 2012.

On Monday differences re-emerged when a clutch of Latin American countries said they could not start negotiations on the new text.

The United States said it did not think the new text was intended as a basis for negotiations and South Africa said the document put too much burden on developing countries.

The Latin American group including Bolivia, Venezuela and Cuba said on Monday that the new text placed too much emphasis on the Copenhagen accord, which they opposed in December.

"The chair has prioritized the Copenhagen Accord," said Rene Gonzalo Orellana Halkyer, a member of the Bolivian delegation, speaking on the sidelines of the talks in Bonn.

Bolivia also wanted tougher targets, for example to return atmospheric greenhouse gases to a level far below where they are already, he added.

The Copenhagen Accord seeks to limit a rise in average world temperatures to below 2 degrees Celsius (3.6 F) over pre-industrial times but does not spell out how.

Margaret Mukahanana-Sangarwe of Zimbabwe chairs the U.N. talks on forging agreement on global action and is expected to release a revised version next weekend, delegates said.

FIRST STEP

The United States said it believed Mukahanana-Sangarwe's text was not intended to be the basis of negotiations.

"Our view is that the text is Margaret's effort to elicit views so she can develop a formal negotiating text," said Jonathan Pershing, head of the U.S. delegation. "It's a constructive next step."

It remained to be seen whether countries can start negotiations on a revised text in the next two weeks, he told Reuters.

The head of the South African delegation, Alf Wills, said the new text focused too far on cuts in greenhouse gas emissions by developing countries.

"It's completely unbalanced in that respect," he said.

However Karsten Sach, head of Germany's delegation, said: "We think it is a basis for negotiation."

An additional, specific gap to be addressed at the Bonn talks was whether or not developed countries should be allowed to exclude from their national greenhouse gases carbon emissions from chopping trees to produce renewable energy.

That rule, allowed under the existing Kyoto Protocol, would represent "fraudulent accounting," said the head of Papua New Guinea's delegation, Kevin Conrad.