Asiapac Ministers Talk Down Regional Carbon Trade
Date: 29-May-07
Country: AUSTRALIA
Author: Fayen Wong
There is an urgent need to reduce greenhouse gas emissions as countries increases energy consumption to fuel economic growth, but a regional carbon trading scheme would not be a one-size fits all solution, officials from the Asia Pacific Economic Cooperation (APEC) said at a meeting in Darwin.
"It is dependent on each region and each economy to chart a path that is appropriate to their resources and their opportunities. What works for one economy may not be appropriate for another," said US Deputy Secretary Clay Sell, when asked about the likelihood of having an APEC regional trading scheme.
The views were echoed by Philippines' Secretary of Energy, Raphael Lotilla, who said he did not expect to see a regional carbon trading regime at this time as it would be difficult for countries to adopt common standards.
Australia's Resources Minister Ian Macfarlane has said that while APEC ministers would be discussing carbon emissions, there won't be agreements to any region-wide trading system.
"Emissions trading has not been discussed so far... It is not a silver bullet solution," he told reporters.
Energy ministers from the 21-member group are meeting in this northern Australian city this week to discuss carbon emissions and energy security.
MARKET MECHANISMS
The APEC group covers about 40 percent of the world's population and 60 percent of the world's energy demand, and includes major polluters United States and China as members.
Australia and the United States have both refused to ratify the UN Kyoto Protocol on climate change, which sets caps on carbon emissions in developed nations but which sets no binding limits on developing economies such as China and India.
Australian Prime Minister John Howard has said Australia would only take part in carbon trading where companies that cut pollution can sell their excess carbon allocations to others under a global trading system.
The United States has also refused to introduce a national carbon trading system, though some individual US states are pushing ahead with plans for caps on emissions.
Emissions futures trading is well established in the European Union, where industries face caps, and companies there and in Japan are buying credits from emissions-cutting projects in developing countries such as China in opaque bilateral deals.
But some businesses are also urging countries to come together to kick-start a global trading scheme, envisaged under Kyoto, to set a price on carbon and encourage investments in environmentally friendly technologies.
"Market mechanisms are likely to be the most effective means of implementing change," said Russell Caplan, chairman of Royal Dutch Shell Plc in Australia.
"Carbon trading needs to become global to become truly effective and establish a clear market price for CO2 that will be factored in to the investment evaluations of the new technologies and energy conservation measures that we need for a low-carbon future."