CMA Media
Carbon Market Needs Better Governance for Growth, Karmali Says
Bloomberg, August 5th, 2008
By Mathew Carr
The global greenhouse gas market needs better governance to give investors and banks confidence to finance trades potentially valued at
CMA Media
Carbon Market Needs Better Governance for Growth, Karmali Says
Bloomberg, August 5th, 2008
By Mathew Carr
The global greenhouse gas market needs better governance to give investors and banks confidence to finance trades potentially valued at at
CMA Media
Carbon Market Needs Better Governance for Growth, Karmali Says
Bloomberg, August 5th, 2008
By Mathew Carr
The global greenhouse gas market needs better governance to give investors and banks confidence to finance trades potentially valued at
CMA Media
trillion by 2020, said Merrill Lynch & Co.'s Abyd Karmali.
``At present, we lack the most appropriate governance structure,'' Karmali, the London-based global head of carbon markets at Merrill, said today by phone. Karmali said he was elected president of the Carbon Market and Investors Association for a two-year term starting Aug. 1.
The greenhouse gas market, which had billion of trades last year, may grow to a third of the size of the oil market by 2020 as governments seek to curb output of heat-trapping gases
blamed for climate change, Karmali said. The United Nations is leading negotiations for a successor to the 1997 Kyoto Protocol in a series of meetings through next year.
Emission reduction projects may struggle to get finance unless governments set new rules quickly, Karmali said. ``There is pervasive uncertainty about post 2012,'' the final year
covered by the protocol, an agreement between nations to curb emissions of industrialized nations.
It's too early to say how the market should be governed, Karmali said. ``There needs to be transparency in market oversight,'' which the association hopes to help create, he said. Negotiations on national emission limits are continuing, amid disagreement about whether developing nations, including China and India, should soon accept emission caps.
The association is the result of a merger between the International Carbon Investors & Services and the Carbon Markets Association, two London-based lobby groups. It will help represent the investors, consultants, brokers, lawfirms and emission-reduction project managers, ``those putting significant capital at risk,'' Karmali said. ``The next two years is going to be an extremely challenging period.''
The 60 members of the new association include Citigroup Inc., lawfirm Norton Rose LLP, broker ICAP Plc and EcoSecurities Group Plc, according to an e-mailed statement. They handled
about three quarters of the value of carbon trades made last year, it said.
ENDS
trillion by 2020, said Merrill Lynch & Co.'s Abyd Karmali.
EU Emission Traders Propose Greater Use of UN Credits
Bloomberg, April 18th, 2008
By Mathew Carr
The Carbon Markets Association, a London emissions-trading industry group including Barclays Capital and EcoSecurities Plc, proposed that European regulators allow greater use of United Nations greenhouse-gas credits starting in 2013.
The group proposed to reduce the volume of auctioned European Union carbon dioxide allowances in the region's emissions market, replacing them with an permits of so-called certified emission reduction credits, or CERs, generated from projects in developing nations, the association said today by e-mail.
The European Commission, regulator of the market, in January proposed limiting the use of UN credits in the EU program to about 1.4 billion metric tons for the 13 years through 2020. That would limit investment in emission-reduction projects, because previously that number of credits applied to the five years through 2012. The program's third phase, for which rules aren't yet set, starts in 2013.
``The proposal will allow people to keep investing at a time when the environment needs it most,'' said Lucy Mortimer, the global manager of the UN-issued emission credits unit of Tradition Financial Services.
The commission proposed cutting carbon-dioxide allowances for electricity, steel, paper and other industries now in the EU system by 11 percent on average in 2013-2020 from 2008-2012. EU emissions trading rules require factories and power stations that exceedtheir quotas to buy permits from companies that emit.
`Similar Manner'
The regulator could distribute the cap on use of the CERs ``in a similar manner as in the five years through 2012, where installations are allocated the right to use set volumes,'' said Adam Nathan, a spokesman for the association, by e-mail.
The so-called clean development mechanism of CDM, managed by the UN Framework Convention on Climate Change, is the world's second-biggest emissions-trading market, after the EU system. Its CER credits are measured in metric tons of carbon dioxide equivalent.
The change, supported by the more than 40 trading companies, law firms and brokerages that are members of the association, would ``ensure that investors and project developers can maintain confidence in a post-2012 market without a negative impact'' on the European Commission's objectives, according to the association's statement.
The region's targets include curbing carbon dioxide output by 20 percent by 2020 compared with 1990 levels. The commission couldn't be reached for immediate comment by e-mail or phone calls to its press service.
`Genuine'
The proposal is arguably better for the environment than the commission's plan because a CER is ``the result of a genuine emissions reduction activity, as opposed to an auctioned EU allowance,'' which is allocated because of historical greenhouse-gas output, Nathan said.
The world market for greenhouse-gas trading rose 80 percent in value last year to 40.4 billion euros ( billion) as volumes of UN credits tripled, Point Carbon, an Oslo-based research and publishing company, said in January. Trade of EU carbon-dioxide allowances jumped 55 percent to 28.1 billion euros. With a ``satisfactory'' global pact, the EU says it would go as far as cutting greenhouse gases by 30 percent in 2020.
No Carbon Targets, but Negotiating Roadmap Agreed Along with Commitments to Tackle Deforestation and Reform Carbon Markets
BusinessGreen, December 17, 2007
By James Murray
The UN's climate change conference in Bali was hailed as a "huge step forward" over the weekend after an eleventh hour compromise deal saw both developed and developing countries sign up to a roadmap for achieving a global climate agreement by the end of 2009.
The Environment Secretary, Hilary Benn, said the deal represented "an historic breakthrough" that for the first time saw all the world's nations agreeing to negotiate a deal to tackle dangerous climate change.
"We came here saying we wanted a roadmap that included every country and covered emission reductions from developed countries and fair and equitable contributions from developing countries," he said. "We leave here with all of this and more, a groundbreaking agreement on deforestation, and others on adaptation and technology."
Yvo de Boer, head of the UN Climate Change Secretariat, who broke down at one point during the marathon negotiations when it appeared a deal was slipping away, agreed the talks had proved successful.
"All three things I wanted have come out of these talks - launch, agenda, end date," he told reporters.
Under the agreement, delegates agreed to a timetable for negotiations over the next two years which is scheduled to culminate in a full agreement being reached at the UN's conference in Copenhagen in late 2009.
The final agreement also recognises the need for "deep cuts in global emissions" and calls for a "long-term goal for emissions reductions".
Consensus was only reached following a last minute U-turn from the US, which had been resisting calls from developing nations for greater technological and financial help to combat the issue.
David Symons, director of corporate services at green consultancy WSP Environmental, advised firms to keep a close eye on negotiations as they proceed over the next two years.
"Businesses will need to look at the roadmap systematically," he said. " There will be four main areas for discussion - adaptation, reducing green house gases, promoting climate friendly technology and how it is all financed - businesses need to look at each of those areas and look at how they will impact them."
He added that there were plenty of reasons to be optimistic that a final agreement could be reached by 2009.
"One of the key considerations is that there will be a new US president by then and all the presidential candidates seem a much deeper shade of green than the current administration," he said.
Meanwhile, the current US administration has already expressed "serious concerns" about the final agreement. White House press secretary, Dana Perino, warned that China and India would also have to agree to deep emissions cuts if the US is to continue to support the negotiations. The final agreement divided environmentalists and green business groups.
Several environmental business and investment groups, including Prince Charles' Corporate Leaders Group on Climate Change and the Institutional Investors Group on Climate Change, had called for binding emission reduction targets to be included as part of the agreement.
But EU-backed proposals for cuts in rich countries emissions of between 25 and 40 per cent were rejected by the US and several other developed countries on the grounds that targets would "pre-judge" the results of future negotiations. A compromise draft agreement stating that global emissions should peak within the next 10 to 15 years and then be cut by half by 2050 was also rejected, leaving only the vague commitment to "deep cuts".
Adam Nathan, director of communications for the Carbon Markets Association (CMA), welcomed the agreement but warned that binding emission targets would be required in the final treaty.
"The process to 2009 should at a minimum deliver an extension of the first phase binding commitments beyond 2012 as well the engagement of a broader group of nations with binding commitments," he said. "Long-term credible and binding commitments covering all major emitters are ultimately essential to deliver the massive investments required in emissions abatement."
However, there was considerable progress on other aspects of the post-2012 framework with delegates agreeing to a new work programme designed to accelerate and scale up investment in mitigation and adaptation technologies, and new rules on the governance on the UN's Adaptation Fund for poorer countries attempting to cope with climate change.
There was also good news for the global carbon market after an agreement was reached to reform the management of the UN's Clean Development Mechanism (CDM) carbon trading programme and abolish registration fees and levies on projects in the poorest countries.
The CDM has been heavily criticised for imposing expensive registration fees on carbon reduction projects, making it uneconomical for smaller projects in developing economies to join the scheme and sell credits into the carbon market.
Under the new proposals, fees will be abolished in the least developed countries and carbon reduction projects based on non-renewable biomass, such as initiatives to provide communities that use open fires for cooking with more efficient cooking stoves, will be allowed to enter the scheme and sell carbon credits.
The final agreement also included a new commitment to address tropical deforestation through a new Reducing Emissions from Deforestation and Degradation (REDD) initiative that could see governments offered financial incentives to tackle tropical deforestation and forestry projects incorporated into the global carbon market.
"A strong, well-funded REDD mechanism will enable tropical forest countries to develop their economies without destroying their forests," said Rodney Taylor, director of WWF's Global Forest Programme. "In doing so, they will make a real contribution to mitigating global climate change."
Climate Talks Take on Added Urgency After Report
The New York Times, December 2, 2007
Thousands of government officials, industry lobbyists, environmental campaigners and observers are arriving on the Indonesian island of Bali for two weeks of talks starting Monday that are aimed at breathing new life into the troubled 15-year-old global climate treaty.
A heightened sense of urgency surrounds the meeting in light of a report issued last month by the United Nations Intergovernmental Panel on Climate Change, which detailed the potentially devastating effects of global warming in the panel's strongest language yet.
But few participants expect this round of talks to produce significant breakthroughs. At most, they say, it will result in new commitments to negotiate to update the original treaty by the end of 2009.
"The bulk of attention will be on the future," said Yvo de Boer, executive secretary of the United Nations Framework Convention on Climate Change, the organization administering the treaty. "My hope is that we can formally launch negotiations and form an agenda for those negotiations that will lead to a long-term policy response to climate change."
The original treaty, signed by almost all nations in 1992, set voluntary goals for curbing the emission of greenhouse gases, which mostly come from burning fossil fuels and forests, and which have been linked by scientists to global warming. But few of those goals have been met.
Five years later, the Kyoto Protocol, a much-praised 1997 addendum to the original pact, set mandatory limits on emissions, but only for the three dozen industrialized countries that ratified it, and only through 2012. Since it took effect in 2005, emissions have continued to rise in many of those countries.
"We would be in big trouble if we can't reach an agreement to move forward by the end of the conference," Mr. de Boer said. "The science is clear. We now need a political answer."
By far, the biggest obstacle to forging a new accord by 2009 is the United States, analysts say. Senior Bush administration officials say the administration will not agree to a new treaty with binding limits on emissions.
Instead, President Bush recently proposed that the world's biggest countries work toward a common, long-term goal set decades in the future, without specific targets or limits, and more immediate goals set by individual nations using whatever means they choose.
In his latest statement on climate change last Wednesday, Mr. Bush said, "Our guiding principle is clear: we must lead the world to produce fewer greenhouse gas emissions, and we must do it in a way that does not undermine economic growth or prevent nations from delivering greater prosperity for their people."
Paula Dobriansky, the under secretary of state for democracy and global affairs, said in a recent interview that any new agreement should involve all the world's major economies. "We feel very strongly about having a global framework here," she said. "In order to have a global framework there has to be an effort here to determine how one can engage all the players. In order to do that there has to be some flexibility in this."
The United States will soon stand alone among industrialized nations in its refusal to ratify the Kyoto Protocol, with the new Australian prime minister, Kevin Rudd, having said in no uncertain terms that his country would now ratify it.
"The Bush administration is the only government in the world that is opposed to mandatory emissions reductions being included in a new treaty," said Philip Clapp, the deputy managing director of the Pew Environment Group, based in Washington. "The question is, will they block others from moving forward."
While most developing countries - including China, which is poised to overtake the United States as the largest source of greenhouse gases - have agreed to negotiate treaties that require richer nations to reduce emissions, they remain opposed to taking on such mandatory limits themselves.
By contrast, adherents to the Kyoto pact, led by the European Union, are eager to extend and even broaden current emission restrictions. One reason is that Kyoto nations are already buying and selling credits - already worth several billion dollars a year - for cutting greenhouse gas emissions under the so-called cap-and-trade system. Such trade could collapse if the restrictions are not extended.
"Negotiations in Bali cannot afford to fail," said Adam Nathan, director of communications for the Carbon Markets Association, an international industry trade association. "It is vitally important that ministers meeting in Bali do not let the date for a new global agreement slip beyond 2009, as this will send a weak signal to the carbon markets."
The growing call for financial aid to help the developing countries most threatened by the negative effects of a warming climate - like harsher droughts, floods and disrupted water supplies and agriculture - is expected to be a central issue at the Bali talks.
The recent United Nations Human Development Report pointedly criticized the world's industrialized powers for not living up to existing commitments under the original Framework Convention. So far, only million has made it through financial pipelines ostensibly intended to funnel billions of dollars for climate-adaptation assistance, the report said.
The United States also plans to press for commitments by rich countries to spend more to refine and deploy nonpolluting energy technologies, including systems for capturing carbon dioxide emitted by power plants, and for all countries to change trade and tariff policies to speed the diffusion of such technologies to places where they are needed most, like China.
For ordinary residents here in Indonesia, a political solution cannot come soon enough. The WWF, the global conservation organization formerly known as the World Wildlife Fund, says Indonesia is highly vulnerable to climate change. Drought, floods, landslides and rising sea levels are part of daily life here.
"To Indonesians, these problems are becoming commonplace," said Farah Sofa, national director of Walhi, Indonesia's leading environmental watchdog group. "It's really bad. Governments should be our protectors. They have to find a way forward."
Peter Gelling reported from Jakarta, and Andrew C. Revkin from New York.
UN Should Form New Group to Set Emission Limits, Traders Say
Bloomberg News, November 29, 2007
By Matthew Carr
The United Nations should create a new body to make sure nations create laws to limit output of greenhouse gases starting in 2013, said a London group that represents emission traders and environmental services.
UN officials supervising the effort should establish the group during two weeks of talks starting Dec. 3 to help ensure negotiations take no longer than two years, said Adam Nathan, spokesman for the Carbon Markets Association. The trade group has about 50 members including banks Merrill Lynch & Co. and Citigroup Inc., as well as law firm Norton Rose LLP.
'It is vitally important that ministers meeting in Bali do not let the date for a new global agreement slip beyond 2009, as this will send a weak signal to the carbon markets,'' Nathan said today in an e-mailed statement. Delegates to the UN-sponsored conference in Bali, Indonesia, next month will aim to persuade the U.S. to join a new accord after the Kyoto emissions treaty ends. Delegates may push China and the U.S., the top greenhouse-gas emitters, to join an international regime of CO2 and trading permits among polluters to put a cost on global warming.
Industrialized nations need to curb emissions by at least 25 percent and as much as 40 percent by 2020 from 1990 levels to stabilize the world's climate, according to conclusions at a UN meeting in Vienna in August. 'Any material delay in the negotiations puts at risk the billions of dollars of capital ready to be deployed for low- carbon technologies,'' said Abyd Karmali, managing director at investment bank Merrill Lynch and another CMA spokesman.
A global deal is better than bilateral agreements, such as between the European Union and California, because a plan covering all nations would likely result in less fragmentation and less complexity, the statement said.
LCCS Rebrands as Carbon Markets Association
Environmental Finance, September 13, 2007
London Climate Change Services (LCCS) has relaunched itself as the Carbon Markets Association (CMA), reflecting a broadened remit for the London-based trade association.
"Many of our members are international organisations and the group needed to represent that," said Adam Nathan, the recently appointed director of communications and policy at the CMA.
The renaming was endorsed at the association's annual general meeting in London on Tuesday, at which chairman Anthony Hobley of law firm Norton Rose noted: "It doesn't make sense to promote London specifically. It makes more sense to promote a global market."
LCCS was originally established as a lobbying organisation for companies providing services to the carbon market, excluding large carbon emitters.
The CMA, with more than forty members, will work closely with emitters and with organisations such as the International Emissions Trading Association, Nathan said, but aims to "promote more of a market-based, financial perspective".
The group has established a number of policy streams, focusing on the future of the Kyoto Protocol's Clean Development Mechanism; US climate policy; the interaction between renewable energy and the EU Emissions Trading Scheme; taxation; voluntary carbon markets; and government relations.
"We're working on a number of policy issues that will feed into the UK government, Brussels, and we're increasingly looking towards the COP/MOP [UN climate negotiations, to be held in Bali in December]," Nathan said.
``At present, we lack the most appropriate governance structure,'' Karmali, the London-based global head of carbon markets at Merrill, said today by phone. Karmali said he was elected president of the Carbon Market and Investors Association for a two-year term starting Aug. 1.
The greenhouse gas market, which had billion of trades last year, may grow to a third of the size of the oil market by 2020 as governments seek to curb output of heat-trapping gases
blamed for climate change, Karmali said. The United Nations is leading negotiations for a successor to the 1997 Kyoto Protocol in a series of meetings through next year.
Emission reduction projects may struggle to get finance unless governments set new rules quickly, Karmali said. ``There is pervasive uncertainty about post 2012,'' the final year
covered by the protocol, an agreement between nations to curb emissions of industrialized nations.
It's too early to say how the market should be governed, Karmali said. ``There needs to be transparency in market oversight,'' which the association hopes to help create, he said. Negotiations on national emission limits are continuing, amid disagreement about whether developing nations, including China and India, should soon accept emission caps.
The association is the result of a merger between the International Carbon Investors & Services and the Carbon Markets Association, two London-based lobby groups. It will help represent the investors, consultants, brokers, lawfirms and emission-reduction project managers, ``those putting significant capital at risk,'' Karmali said. ``The next two years is going to be an extremely challenging period.''
The 60 members of the new association include Citigroup Inc., lawfirm Norton Rose LLP, broker ICAP Plc and EcoSecurities Group Plc, according to an e-mailed statement. They handled
about three quarters of the value of carbon trades made last year, it said.
ENDS
EU Emission Traders Propose Greater Use of UN Credits
Bloomberg, April 18th, 2008
By Mathew Carr
The Carbon Markets Association, a London emissions-trading industry group including Barclays Capital and EcoSecurities Plc, proposed that European regulators allow greater use of United Nations greenhouse-gas credits starting in 2013.
The group proposed to reduce the volume of auctioned European Union carbon dioxide allowances in the region's emissions market, replacing them with an permits of so-called certified emission reduction credits, or CERs, generated from projects in developing nations, the association said today by e-mail.
The European Commission, regulator of the market, in January proposed limiting the use of UN credits in the EU program to about 1.4 billion metric tons for the 13 years through 2020. That would limit investment in emission-reduction projects, because previously that number of credits applied to the five years through 2012. The program's third phase, for which rules aren't yet set, starts in 2013.
``The proposal will allow people to keep investing at a time when the environment needs it most,'' said Lucy Mortimer, the global manager of the UN-issued emission credits unit of Tradition Financial Services.
The commission proposed cutting carbon-dioxide allowances for electricity, steel, paper and other industries now in the EU system by 11 percent on average in 2013-2020 from 2008-2012. EU emissions trading rules require factories and power stations that exceedtheir quotas to buy permits from companies that emit.
`Similar Manner'
The regulator could distribute the cap on use of the CERs ``in a similar manner as in the five years through 2012, where installations are allocated the right to use set volumes,'' said Adam Nathan, a spokesman for the association, by e-mail.
The so-called clean development mechanism of CDM, managed by the UN Framework Convention on Climate Change, is the world's second-biggest emissions-trading market, after the EU system. Its CER credits are measured in metric tons of carbon dioxide equivalent.
The change, supported by the more than 40 trading companies, law firms and brokerages that are members of the association, would ``ensure that investors and project developers can maintain confidence in a post-2012 market without a negative impact'' on the European Commission's objectives, according to the association's statement.
The region's targets include curbing carbon dioxide output by 20 percent by 2020 compared with 1990 levels. The commission couldn't be reached for immediate comment by e-mail or phone calls to its press service.
`Genuine'
The proposal is arguably better for the environment than the commission's plan because a CER is ``the result of a genuine emissions reduction activity, as opposed to an auctioned EU allowance,'' which is allocated because of historical greenhouse-gas output, Nathan said.
The world market for greenhouse-gas trading rose 80 percent in value last year to 40.4 billion euros ( billion) as volumes of UN credits tripled, Point Carbon, an Oslo-based research and publishing company, said in January. Trade of EU carbon-dioxide allowances jumped 55 percent to 28.1 billion euros. With a ``satisfactory'' global pact, the EU says it would go as far as cutting greenhouse gases by 30 percent in 2020.
No Carbon Targets, but Negotiating Roadmap Agreed Along with Commitments to Tackle Deforestation and Reform Carbon Markets
BusinessGreen, December 17, 2007
By James Murray
The UN's climate change conference in Bali was hailed as a "huge step forward" over the weekend after an eleventh hour compromise deal saw both developed and developing countries sign up to a roadmap for achieving a global climate agreement by the end of 2009.
The Environment Secretary, Hilary Benn, said the deal represented "an historic breakthrough" that for the first time saw all the world's nations agreeing to negotiate a deal to tackle dangerous climate change.
"We came here saying we wanted a roadmap that included every country and covered emission reductions from developed countries and fair and equitable contributions from developing countries," he said. "We leave here with all of this and more, a groundbreaking agreement on deforestation, and others on adaptation and technology."
Yvo de Boer, head of the UN Climate Change Secretariat, who broke down at one point during the marathon negotiations when it appeared a deal was slipping away, agreed the talks had proved successful.
"All three things I wanted have come out of these talks - launch, agenda, end date," he told reporters.
Under the agreement, delegates agreed to a timetable for negotiations over the next two years which is scheduled to culminate in a full agreement being reached at the UN's conference in Copenhagen in late 2009.
The final agreement also recognises the need for "deep cuts in global emissions" and calls for a "long-term goal for emissions reductions".
Consensus was only reached following a last minute U-turn from the US, which had been resisting calls from developing nations for greater technological and financial help to combat the issue.
David Symons, director of corporate services at green consultancy WSP Environmental, advised firms to keep a close eye on negotiations as they proceed over the next two years.
"Businesses will need to look at the roadmap systematically," he said. " There will be four main areas for discussion - adaptation, reducing green house gases, promoting climate friendly technology and how it is all financed - businesses need to look at each of those areas and look at how they will impact them."
He added that there were plenty of reasons to be optimistic that a final agreement could be reached by 2009.
"One of the key considerations is that there will be a new US president by then and all the presidential candidates seem a much deeper shade of green than the current administration," he said.
Meanwhile, the current US administration has already expressed "serious concerns" about the final agreement. White House press secretary, Dana Perino, warned that China and India would also have to agree to deep emissions cuts if the US is to continue to support the negotiations. The final agreement divided environmentalists and green business groups.
Several environmental business and investment groups, including Prince Charles' Corporate Leaders Group on Climate Change and the Institutional Investors Group on Climate Change, had called for binding emission reduction targets to be included as part of the agreement.
But EU-backed proposals for cuts in rich countries emissions of between 25 and 40 per cent were rejected by the US and several other developed countries on the grounds that targets would "pre-judge" the results of future negotiations. A compromise draft agreement stating that global emissions should peak within the next 10 to 15 years and then be cut by half by 2050 was also rejected, leaving only the vague commitment to "deep cuts".
Adam Nathan, director of communications for the Carbon Markets Association (CMA), welcomed the agreement but warned that binding emission targets would be required in the final treaty.
"The process to 2009 should at a minimum deliver an extension of the first phase binding commitments beyond 2012 as well the engagement of a broader group of nations with binding commitments," he said. "Long-term credible and binding commitments covering all major emitters are ultimately essential to deliver the massive investments required in emissions abatement."
However, there was considerable progress on other aspects of the post-2012 framework with delegates agreeing to a new work programme designed to accelerate and scale up investment in mitigation and adaptation technologies, and new rules on the governance on the UN's Adaptation Fund for poorer countries attempting to cope with climate change.
There was also good news for the global carbon market after an agreement was reached to reform the management of the UN's Clean Development Mechanism (CDM) carbon trading programme and abolish registration fees and levies on projects in the poorest countries.
The CDM has been heavily criticised for imposing expensive registration fees on carbon reduction projects, making it uneconomical for smaller projects in developing economies to join the scheme and sell credits into the carbon market.
Under the new proposals, fees will be abolished in the least developed countries and carbon reduction projects based on non-renewable biomass, such as initiatives to provide communities that use open fires for cooking with more efficient cooking stoves, will be allowed to enter the scheme and sell carbon credits.
The final agreement also included a new commitment to address tropical deforestation through a new Reducing Emissions from Deforestation and Degradation (REDD) initiative that could see governments offered financial incentives to tackle tropical deforestation and forestry projects incorporated into the global carbon market.
"A strong, well-funded REDD mechanism will enable tropical forest countries to develop their economies without destroying their forests," said Rodney Taylor, director of WWF's Global Forest Programme. "In doing so, they will make a real contribution to mitigating global climate change."
Climate Talks Take on Added Urgency After Report
The New York Times, December 2, 2007
Thousands of government officials, industry lobbyists, environmental campaigners and observers are arriving on the Indonesian island of Bali for two weeks of talks starting Monday that are aimed at breathing new life into the troubled 15-year-old global climate treaty.
A heightened sense of urgency surrounds the meeting in light of a report issued last month by the United Nations Intergovernmental Panel on Climate Change, which detailed the potentially devastating effects of global warming in the panel's strongest language yet.
But few participants expect this round of talks to produce significant breakthroughs. At most, they say, it will result in new commitments to negotiate to update the original treaty by the end of 2009.
"The bulk of attention will be on the future," said Yvo de Boer, executive secretary of the United Nations Framework Convention on Climate Change, the organization administering the treaty. "My hope is that we can formally launch negotiations and form an agenda for those negotiations that will lead to a long-term policy response to climate change."
The original treaty, signed by almost all nations in 1992, set voluntary goals for curbing the emission of greenhouse gases, which mostly come from burning fossil fuels and forests, and which have been linked by scientists to global warming. But few of those goals have been met.
Five years later, the Kyoto Protocol, a much-praised 1997 addendum to the original pact, set mandatory limits on emissions, but only for the three dozen industrialized countries that ratified it, and only through 2012. Since it took effect in 2005, emissions have continued to rise in many of those countries.
"We would be in big trouble if we can't reach an agreement to move forward by the end of the conference," Mr. de Boer said. "The science is clear. We now need a political answer."
By far, the biggest obstacle to forging a new accord by 2009 is the United States, analysts say. Senior Bush administration officials say the administration will not agree to a new treaty with binding limits on emissions.
Instead, President Bush recently proposed that the world's biggest countries work toward a common, long-term goal set decades in the future, without specific targets or limits, and more immediate goals set by individual nations using whatever means they choose.
In his latest statement on climate change last Wednesday, Mr. Bush said, "Our guiding principle is clear: we must lead the world to produce fewer greenhouse gas emissions, and we must do it in a way that does not undermine economic growth or prevent nations from delivering greater prosperity for their people."
Paula Dobriansky, the under secretary of state for democracy and global affairs, said in a recent interview that any new agreement should involve all the world's major economies. "We feel very strongly about having a global framework here," she said. "In order to have a global framework there has to be an effort here to determine how one can engage all the players. In order to do that there has to be some flexibility in this."
The United States will soon stand alone among industrialized nations in its refusal to ratify the Kyoto Protocol, with the new Australian prime minister, Kevin Rudd, having said in no uncertain terms that his country would now ratify it.
"The Bush administration is the only government in the world that is opposed to mandatory emissions reductions being included in a new treaty," said Philip Clapp, the deputy managing director of the Pew Environment Group, based in Washington. "The question is, will they block others from moving forward."
While most developing countries - including China, which is poised to overtake the United States as the largest source of greenhouse gases - have agreed to negotiate treaties that require richer nations to reduce emissions, they remain opposed to taking on such mandatory limits themselves.
By contrast, adherents to the Kyoto pact, led by the European Union, are eager to extend and even broaden current emission restrictions. One reason is that Kyoto nations are already buying and selling credits - already worth several billion dollars a year - for cutting greenhouse gas emissions under the so-called cap-and-trade system. Such trade could collapse if the restrictions are not extended.
"Negotiations in Bali cannot afford to fail," said Adam Nathan, director of communications for the Carbon Markets Association, an international industry trade association. "It is vitally important that ministers meeting in Bali do not let the date for a new global agreement slip beyond 2009, as this will send a weak signal to the carbon markets."
The growing call for financial aid to help the developing countries most threatened by the negative effects of a warming climate - like harsher droughts, floods and disrupted water supplies and agriculture - is expected to be a central issue at the Bali talks.
The recent United Nations Human Development Report pointedly criticized the world's industrialized powers for not living up to existing commitments under the original Framework Convention. So far, only million has made it through financial pipelines ostensibly intended to funnel billions of dollars for climate-adaptation assistance, the report said.
The United States also plans to press for commitments by rich countries to spend more to refine and deploy nonpolluting energy technologies, including systems for capturing carbon dioxide emitted by power plants, and for all countries to change trade and tariff policies to speed the diffusion of such technologies to places where they are needed most, like China.
For ordinary residents here in Indonesia, a political solution cannot come soon enough. The WWF, the global conservation organization formerly known as the World Wildlife Fund, says Indonesia is highly vulnerable to climate change. Drought, floods, landslides and rising sea levels are part of daily life here.
"To Indonesians, these problems are becoming commonplace," said Farah Sofa, national director of Walhi, Indonesia's leading environmental watchdog group. "It's really bad. Governments should be our protectors. They have to find a way forward."
Peter Gelling reported from Jakarta, and Andrew C. Revkin from New York.
UN Should Form New Group to Set Emission Limits, Traders Say
Bloomberg, November 29, 2007
By Matthew Carr
The United Nations should create a new body to make sure nations create laws to limit output of greenhouse gases starting in 2013, said a London group that represents emission traders and environmental services.
UN officials supervising the effort should establish the group during two weeks of talks starting Dec. 3 to help ensure negotiations take no longer than two years, said Adam Nathan, spokesman for the Carbon Markets Association. The trade group has about 50 members including banks Merrill Lynch & Co. and Citigroup Inc., as well as law firm Norton Rose LLP.
'It is vitally important that ministers meeting in Bali do not let the date for a new global agreement slip beyond 2009, as this will send a weak signal to the carbon markets,'' Nathan said today in an e-mailed statement. Delegates to the UN-sponsored conference in Bali, Indonesia, next month will aim to persuade the U.S. to join a new accord after the Kyoto emissions treaty ends. Delegates may push China and the U.S., the top greenhouse-gas emitters, to join an international regime of CO2 and trading permits among polluters to put a cost on global warming.
Industrialized nations need to curb emissions by at least 25 percent and as much as 40 percent by 2020 from 1990 levels to stabilize the world's climate, according to conclusions at a UN meeting in Vienna in August. 'Any material delay in the negotiations puts at risk the billions of dollars of capital ready to be deployed for low- carbon technologies,'' said Abyd Karmali, managing director at investment bank Merrill Lynch and another CMA spokesman.
A global deal is better than bilateral agreements, such as between the European Union and California, because a plan covering all nations would likely result in less fragmentation and less complexity, the statement said.
LCCS Rebrands as Carbon Markets Association
Environmental Finance, September 13, 2007
London Climate Change Services (LCCS) has relaunched itself as the Carbon Markets Association (CMA), reflecting a broadened remit for the London-based trade association.
"Many of our members are international organisations and the group needed to represent that," said Adam Nathan, the recently appointed director of communications and policy at the CMA.
The renaming was endorsed at the association's annual general meeting in London on Tuesday, at which chairman Anthony Hobley of law firm Norton Rose noted: "It doesn't make sense to promote London specifically. It makes more sense to promote a global market."
LCCS was originally established as a lobbying organisation for companies providing services to the carbon market, excluding large carbon emitters.
The CMA, with more than forty members, will work closely with emitters and with organisations such as the International Emissions Trading Association, Nathan said, but aims to "promote more of a market-based, financial perspective".
The group has established a number of policy streams, focusing on the future of the Kyoto Protocol's Clean Development Mechanism; US climate policy; the interaction between renewable energy and the EU Emissions Trading Scheme; taxation; voluntary carbon markets; and government relations.
"We're working on a number of policy issues that will feed into the UK government, Brussels, and we're increasingly looking towards the COP/MOP [UN climate negotiations, to be held in Bali in December]," Nathan said.
``At present, we lack the most appropriate governance structure,'' Karmali, the London-based global head of carbon markets at Merrill, said today by phone. Karmali said he was elected president of the Carbon Market and Investors Association for a two-year term starting Aug. 1.
The greenhouse gas market, which had billion of trades last year, may grow to a third of the size of the oil market by 2020 as governments seek to curb output of heat-trapping gases
blamed for climate change, Karmali said. The United Nations is leading negotiations for a successor to the 1997 Kyoto Protocol in a series of meetings through next year.
Emission reduction projects may struggle to get finance unless governments set new rules quickly, Karmali said. ``There is pervasive uncertainty about post 2012,'' the final year
covered by the protocol, an agreement between nations to curb emissions of industrialized nations.
It's too early to say how the market should be governed, Karmali said. ``There needs to be transparency in market oversight,'' which the association hopes to help create, he said. Negotiations on national emission limits are continuing, amid disagreement about whether developing nations, including China and India, should soon accept emission caps.
The association is the result of a merger between the International Carbon Investors & Services and the Carbon Markets Association, two London-based lobby groups. It will help represent the investors, consultants, brokers, lawfirms and emission-reduction project managers, ``those putting significant capital at risk,'' Karmali said. ``The next two years is going to be an extremely challenging period.''
The 60 members of the new association include Citigroup Inc., lawfirm Norton Rose LLP, broker ICAP Plc and EcoSecurities Group Plc, according to an e-mailed statement. They handled
about three quarters of the value of carbon trades made last year, it said.
ENDS
The greenhouse gas market, which had billion of trades last year, may grow to a third of the size of the oil market by 2020 as governments seek to curb output of heat-trapping gases
blamed for climate change, Karmali said. The United Nations is leading negotiations for a successor to the 1997 Kyoto Protocol in a series of meetings through next year.
Emission reduction projects may struggle to get finance unless governments set new rules quickly, Karmali said. ``There is pervasive uncertainty about post 2012,'' the final year
covered by the protocol, an agreement between nations to curb emissions of industrialized nations.
It's too early to say how the market should be governed, Karmali said. ``There needs to be transparency in market oversight,'' which the association hopes to help create, he said. Negotiations on national emission limits are continuing, amid disagreement about whether developing nations, including China and India, should soon accept emission caps.
The association is the result of a merger between the International Carbon Investors & Services and the Carbon Markets Association, two London-based lobby groups. It will help represent the investors, consultants, brokers, lawfirms and emission-reduction project managers, ``those putting significant capital at risk,'' Karmali said. ``The next two years is going to be an extremely challenging period.''
The 60 members of the new association include Citigroup Inc., lawfirm Norton Rose LLP, broker ICAP Plc and EcoSecurities Group Plc, according to an e-mailed statement. They handled
about three quarters of the value of carbon trades made last year, it said.
ENDS
EU Emission Traders Propose Greater Use of UN Credits
Bloomberg, April 18th, 2008
By Mathew Carr
The Carbon Markets Association, a London emissions-trading industry group including Barclays Capital and EcoSecurities Plc, proposed that European regulators allow greater use of United Nations greenhouse-gas credits starting in 2013.
The group proposed to reduce the volume of auctioned European Union carbon dioxide allowances in the region's emissions market, replacing them with an permits of so-called certified emission reduction credits, or CERs, generated from projects in developing nations, the association said today by e-mail.
The European Commission, regulator of the market, in January proposed limiting the use of UN credits in the EU program to about 1.4 billion metric tons for the 13 years through 2020. That would limit investment in emission-reduction projects, because previously that number of credits applied to the five years through 2012. The program's third phase, for which rules aren't yet set, starts in 2013.
``The proposal will allow people to keep investing at a time when the environment needs it most,'' said Lucy Mortimer, the global manager of the UN-issued emission credits unit of Tradition Financial Services.
The commission proposed cutting carbon-dioxide allowances for electricity, steel, paper and other industries now in the EU system by 11 percent on average in 2013-2020 from 2008-2012. EU emissions trading rules require factories and power stations that exceedtheir quotas to buy permits from companies that emit.
`Similar Manner'
The regulator could distribute the cap on use of the CERs ``in a similar manner as in the five years through 2012, where installations are allocated the right to use set volumes,'' said Adam Nathan, a spokesman for the association, by e-mail.
The so-called clean development mechanism of CDM, managed by the UN Framework Convention on Climate Change, is the world's second-biggest emissions-trading market, after the EU system. Its CER credits are measured in metric tons of carbon dioxide equivalent.
The change, supported by the more than 40 trading companies, law firms and brokerages that are members of the association, would ``ensure that investors and project developers can maintain confidence in a post-2012 market without a negative impact'' on the European Commission's objectives, according to the association's statement.
The region's targets include curbing carbon dioxide output by 20 percent by 2020 compared with 1990 levels. The commission couldn't be reached for immediate comment by e-mail or phone calls to its press service.
`Genuine'
The proposal is arguably better for the environment than the commission's plan because a CER is ``the result of a genuine emissions reduction activity, as opposed to an auctioned EU allowance,'' which is allocated because of historical greenhouse-gas output, Nathan said.
The world market for greenhouse-gas trading rose 80 percent in value last year to 40.4 billion euros ( billion) as volumes of UN credits tripled, Point Carbon, an Oslo-based research and publishing company, said in January. Trade of EU carbon-dioxide allowances jumped 55 percent to 28.1 billion euros. With a ``satisfactory'' global pact, the EU says it would go as far as cutting greenhouse gases by 30 percent in 2020.
No Carbon Targets, but Negotiating Roadmap Agreed Along with Commitments to Tackle Deforestation and Reform Carbon Markets
BusinessGreen, December 17, 2007
By James Murray
The UN's climate change conference in Bali was hailed as a "huge step forward" over the weekend after an eleventh hour compromise deal saw both developed and developing countries sign up to a roadmap for achieving a global climate agreement by the end of 2009.
The Environment Secretary, Hilary Benn, said the deal represented "an historic breakthrough" that for the first time saw all the world's nations agreeing to negotiate a deal to tackle dangerous climate change.
"We came here saying we wanted a roadmap that included every country and covered emission reductions from developed countries and fair and equitable contributions from developing countries," he said. "We leave here with all of this and more, a groundbreaking agreement on deforestation, and others on adaptation and technology."
Yvo de Boer, head of the UN Climate Change Secretariat, who broke down at one point during the marathon negotiations when it appeared a deal was slipping away, agreed the talks had proved successful.
"All three things I wanted have come out of these talks - launch, agenda, end date," he told reporters.
Under the agreement, delegates agreed to a timetable for negotiations over the next two years which is scheduled to culminate in a full agreement being reached at the UN's conference in Copenhagen in late 2009.
The final agreement also recognises the need for "deep cuts in global emissions" and calls for a "long-term goal for emissions reductions".
Consensus was only reached following a last minute U-turn from the US, which had been resisting calls from developing nations for greater technological and financial help to combat the issue.
David Symons, director of corporate services at green consultancy WSP Environmental, advised firms to keep a close eye on negotiations as they proceed over the next two years.
"Businesses will need to look at the roadmap systematically," he said. " There will be four main areas for discussion - adaptation, reducing green house gases, promoting climate friendly technology and how it is all financed - businesses need to look at each of those areas and look at how they will impact them."
He added that there were plenty of reasons to be optimistic that a final agreement could be reached by 2009.
"One of the key considerations is that there will be a new US president by then and all the presidential candidates seem a much deeper shade of green than the current administration," he said.
Meanwhile, the current US administration has already expressed "serious concerns" about the final agreement. White House press secretary, Dana Perino, warned that China and India would also have to agree to deep emissions cuts if the US is to continue to support the negotiations. The final agreement divided environmentalists and green business groups.
Several environmental business and investment groups, including Prince Charles' Corporate Leaders Group on Climate Change and the Institutional Investors Group on Climate Change, had called for binding emission reduction targets to be included as part of the agreement.
But EU-backed proposals for cuts in rich countries emissions of between 25 and 40 per cent were rejected by the US and several other developed countries on the grounds that targets would "pre-judge" the results of future negotiations. A compromise draft agreement stating that global emissions should peak within the next 10 to 15 years and then be cut by half by 2050 was also rejected, leaving only the vague commitment to "deep cuts".
Adam Nathan, director of communications for the Carbon Markets Association (CMA), welcomed the agreement but warned that binding emission targets would be required in the final treaty.
"The process to 2009 should at a minimum deliver an extension of the first phase binding commitments beyond 2012 as well the engagement of a broader group of nations with binding commitments," he said. "Long-term credible and binding commitments covering all major emitters are ultimately essential to deliver the massive investments required in emissions abatement."
However, there was considerable progress on other aspects of the post-2012 framework with delegates agreeing to a new work programme designed to accelerate and scale up investment in mitigation and adaptation technologies, and new rules on the governance on the UN's Adaptation Fund for poorer countries attempting to cope with climate change.
There was also good news for the global carbon market after an agreement was reached to reform the management of the UN's Clean Development Mechanism (CDM) carbon trading programme and abolish registration fees and levies on projects in the poorest countries.
The CDM has been heavily criticised for imposing expensive registration fees on carbon reduction projects, making it uneconomical for smaller projects in developing economies to join the scheme and sell credits into the carbon market.
Under the new proposals, fees will be abolished in the least developed countries and carbon reduction projects based on non-renewable biomass, such as initiatives to provide communities that use open fires for cooking with more efficient cooking stoves, will be allowed to enter the scheme and sell carbon credits.
The final agreement also included a new commitment to address tropical deforestation through a new Reducing Emissions from Deforestation and Degradation (REDD) initiative that could see governments offered financial incentives to tackle tropical deforestation and forestry projects incorporated into the global carbon market.
"A strong, well-funded REDD mechanism will enable tropical forest countries to develop their economies without destroying their forests," said Rodney Taylor, director of WWF's Global Forest Programme. "In doing so, they will make a real contribution to mitigating global climate change."
Climate Talks Take on Added Urgency After Report
The New York Times, December 2, 2007
Thousands of government officials, industry lobbyists, environmental campaigners and observers are arriving on the Indonesian island of Bali for two weeks of talks starting Monday that are aimed at breathing new life into the troubled 15-year-old global climate treaty.
A heightened sense of urgency surrounds the meeting in light of a report issued last month by the United Nations Intergovernmental Panel on Climate Change, which detailed the potentially devastating effects of global warming in the panel's strongest language yet.
But few participants expect this round of talks to produce significant breakthroughs. At most, they say, it will result in new commitments to negotiate to update the original treaty by the end of 2009.
"The bulk of attention will be on the future," said Yvo de Boer, executive secretary of the United Nations Framework Convention on Climate Change, the organization administering the treaty. "My hope is that we can formally launch negotiations and form an agenda for those negotiations that will lead to a long-term policy response to climate change."
The original treaty, signed by almost all nations in 1992, set voluntary goals for curbing the emission of greenhouse gases, which mostly come from burning fossil fuels and forests, and which have been linked by scientists to global warming. But few of those goals have been met.
Five years later, the Kyoto Protocol, a much-praised 1997 addendum to the original pact, set mandatory limits on emissions, but only for the three dozen industrialized countries that ratified it, and only through 2012. Since it took effect in 2005, emissions have continued to rise in many of those countries.
"We would be in big trouble if we can't reach an agreement to move forward by the end of the conference," Mr. de Boer said. "The science is clear. We now need a political answer."
By far, the biggest obstacle to forging a new accord by 2009 is the United States, analysts say. Senior Bush administration officials say the administration will not agree to a new treaty with binding limits on emissions.
Instead, President Bush recently proposed that the world's biggest countries work toward a common, long-term goal set decades in the future, without specific targets or limits, and more immediate goals set by individual nations using whatever means they choose.
In his latest statement on climate change last Wednesday, Mr. Bush said, "Our guiding principle is clear: we must lead the world to produce fewer greenhouse gas emissions, and we must do it in a way that does not undermine economic growth or prevent nations from delivering greater prosperity for their people."
Paula Dobriansky, the under secretary of state for democracy and global affairs, said in a recent interview that any new agreement should involve all the world's major economies. "We feel very strongly about having a global framework here," she said. "In order to have a global framework there has to be an effort here to determine how one can engage all the players. In order to do that there has to be some flexibility in this."
The United States will soon stand alone among industrialized nations in its refusal to ratify the Kyoto Protocol, with the new Australian prime minister, Kevin Rudd, having said in no uncertain terms that his country would now ratify it.
"The Bush administration is the only government in the world that is opposed to mandatory emissions reductions being included in a new treaty," said Philip Clapp, the deputy managing director of the Pew Environment Group, based in Washington. "The question is, will they block others from moving forward."