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 At the UN's Climate Summit this week a diverse group of global
leaders, from World Bank president Jim Yong Kim to California
Governor Jerry Brown, spoke of the need for polluters to pay for
each ton of carbon they emit. More than 1,000 companies pledged
their support for the effort.
Carbon pricing, largely rejected by the United States and struggling
in Europe, is suddenly all the rage, with China leading the charge.
The world's biggest greenhouse gas emitter plans to establish a
national market for carbon permit trading in 2016 and has already
launched seven regional pilot markets.
Boosters of carbon pricing policies say that once China sets a
national price on carbon, others will follow.
“Once China goes live, that will establish a major price (signal)
that will affect all the other markets and all other (carbon)
prices," said Christiana Figueres, Executive Secretary of the UN
Framework Convention on Climate Change.
China’s top economic planning agency has said its planned carbon
trading scheme will cover 40 percent of its economy and be worth up
to $65 billion.
“You will see a shift in the fulcrum toward China and that will
attract other countries,” Rachel Kyte, World Bank Group special
envoy for climate change, told Reuters.
Governments like Chile and Mexico and U.S. states like California
will be keen to link their emerging carbon markets to the Chinese
model, Kyte said.
South Korean Environment Minister Yoon Seong-kyu said his country,
which in 2015 will be the first in Asia to launch a national carbon
market, wants to eventually link its scheme to China’s.
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Kyte said emerging economies have shown a strong interest in using
measures like markets and taxes to rein in pollution, and have
joined the Bank’s Partnership for Market Readiness for help to shape
their carbon pricing policies.
The initiative is helping countries like Vietnam design and pilot
carbon pricing instruments in its steel, solid waste and power
sectors, Colombia explore the launch of a carbon tax and Kazakhstan
fix problems with the pilot emissions trading scheme it launched in
2013.
The International Emissions Trading Association (IETA) has been
lobbying since 1999 for an international framework for carbon
trading. It also has supported schemes in emerging economies and in
U.S. states like California and the U.S. Northeast's Regional
Greenhouse Gas Initiative, a power sector trading scheme that
launched in 2009.
The group suffered a blow when a national cap-and-trade bill passed
the U.S. House of Representatives in 2009 but died in the Senate a
year later.
Since then, “We’ve spent a lot more of our time talking to
businesses in China to build capacity to make emission trading
work," said Dirk Forrister, president of IETA.
(Reporting by Valerie Volcovici, editing by Ros Krasny and David
Gregorio)
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