EU stance on UN carbon trade may slow climate talks, IETA says

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LONDON (Bloomberg) — The European Commission’s stance on United Nations emission trading may hamper negotiation of an international climate agreement because it threatens developing nations, according to a traders’ lobby group.

The phasing out of the UN’s project-based Clean Development Mechanism proposed by the commission, regulator of the world’s biggest carbon market, would cut cash flowing to poorer nations from industrialized countries, the International Emissions Trading Association said on Tuesday in an e-mailed statement.

Polluters in developed countries have UN-regulated limits for carbon dioxide and other greenhouse gases, enforceable under the 1997 Kyoto Protocol through 2012. They may trim output domestically or, if cheaper, offset their emissions by buying credits from carbon-reduction projects in poorer nations. The Clean Development Mechanism, or CDM, manages this process.

The EU wants to phase out the CDM for “advanced developing countries and highly competitive economic sectors,” the Geneva- based IETA said in the statement, citing the commission. The CDM, overseen by a board under the UN Framework Convention on Climate Change in Bonn, is the world’s second-biggest emissions-trading system, after the European Union program.

“Adding to the threat to these countries by refusing to accept project types that have been legitimized by due UNFCCC process is neither good for the EU’s negotiating position nor good for global emissions reduction,” the IETA said.