(Corrects name of Chilean official in 14th paragraph.)
New carbon programs in at least 14 emerging nations from China to Costa Rica show emissions trading may take off even as U.S. lawmakers focus on non-market-based regulations for climate protection, a World Bank official said.
Seven countries including Mexico and Indonesia are considering emissions-crediting systems, five mull domestic carbon markets while India and South Africa are studying their own plans, Xueman Wang, team leader for the bank’s Partnership for Market Readiness program, said in an interview.
“Brazil and Chile are leaving all options on the table,” she said May 30 at the Carbon Expo in Cologne, Germany.
Carbon trading rose 11 percent to $176 billion last year, the World Bank said in its annual report on May 30. Besides the European Union program, the world’s biggest by traded volume, developed nations and their states have started or plan at least eight greenhouse-gas markets from California to Japan. EU and United Nations carbon prices last month fell to records on robust supply and muted demand.
Developing and emerging nations including China, whose populations make up more than three-quarters of the world’s 7 billion population, are seeking to protect the climate cost- effectively, Wang said.
Emerging countries are choosing industries such as steel and housing, where emission credits can encourage carbon cuts, lowering the cost of climate protection, said Wang.
“These countries know there is very little demand for the time being,” she said. “Some want to fulfill a domestic climate objective. It’s quite an exciting time.”
Their push is being fueled in part by about $80 million under the bank’s readiness program known as PMR, which began in 2010. Japan this month decided to double its contribution to $15 million, Wang said.
Environmental and public health advocates pressed the U.S. Environmental Protection Agency to regulate greenhouse-gas emissions from existing power plants during a May 24 hearing on a proposal to limit carbon dioxide from new fossil fuel-fired units. Cap-and-trade legislation stalled in the U.S. Senate after narrowly passing the House of Representatives in 2009.
“The U.S. intransigence has not stopped emerging economies from valuing carbon in their own way,” James Cameron, chairman of Bunge Ltd. (BG:US)’s Climate Change Capital unit, said in an interview May 30. Cameron helped negotiate the 1997 Kyoto Protocol on behalf small-island states.
The other nations considering crediting are Costa Rica, Columbia, Morocco, Chile, Vietnam and Jordan, Wang said. Vietnam is considering handing out credits for reductions in industries including steel and solid waste and also to power users that boost energy efficiency, she said. The nations are moving ahead even as demand for the credits is unclear, she said.
South Korea, Ukraine, Brazil, Chile and China are considering domestic carbon trading, Wang said. South Korea is not part of the PMR.
Chile plans for a national carbon market were voluntary to help shield its growing economy, an official at the nation’s energy ministry said yesterday.
“We have made it a voluntary market,” Ignacio Fernandez, a climate change official in the ministry, said at the conference. “We are a growing economy. We have to consider our commitment to make it sustainable.”
Chile is working out ways it can link its national market with international programs, he said.
China also wants to link its proposed domestic market with others as it seeks to cut emissions, a government official said.
The country can set a cap on emissions in some regions without curbing economic development, Shu Wang, deputy director of the Climate Change Department at the National Development and Reform Commission, yesterday told delegates.
EU emissions permits for December fell as much as 3 percent today to 6.24 euros ($7.69) a metric ton, near a record low of 5.99 euros on April 4. UN carbon credits for 2012 lost as much as 2.1 percent to 3.30 euros. They reached a record 3.27 euros on April 4.
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