Diplomats at United Nations climate talks this week will consider a two-year deadline for industrial nations to sign up for further cuts in greenhouse-gas emissions after Kyoto Protocol limits expire in December 2012.
Brazil, named by the UN to help broker an agreement on the future of Kyoto, wants industrial nations at this meeting to agree to make new reduction pledges within two years. Mexico, which is coordinating the discussions in Cancun, said the pledges would have to be in place in the first half of 2012.
Adopting the measures may help bolster the price of carbon dioxide emissions permits, which tumbled after talks in Copenhagen in December 2009 failed to produce a new treaty on reducing fossil fuel pollution blamed for global warming.
The envoys “need to send the right signal to the carbon market,” Luiz Alberto Figueiredo Machado, Brazil’s lead negotiator, said in an interview in Cancun. “How this signal will be sent is perhaps the crux of the problem.”
In the past year, Certified Emission Reduction credits for 2012 dropped 19 percent to close at 11.17 euros ($14.95) a metric ton on Dec. 3. Equivalent European Union allowances dropped 5.6 percent to 15.47 euros. Factories and power stations would clean up smokestacks only if prices reach 30 euros a ton, EU Climate Commissioner Connie Hedegaard said in May.
“Hopefully the process is cut down to one year,” said Dirk Forrister, a consultant who was formerly head of U.S. President Bill Clinton’s 1997 taskforce on climate. “If it takes two it’s going to start to make people fret,” he said in an interview in Cancun.
A dispute over how to assure the future of the Kyoto treaty after it expires marred the first of two weeks of talks in the Mexican resort.
Japan, Russia and Canada refused to accept a second round of emissions pledges without developing nations joining in the program. China, India and Brazil said such cuts from rich countries were essential to keep the 18-year old talks alive.
The UN has lowered its ambitions for this year, putting off work on a new legally-binding agreement to replace the Kyoto accord negotiated in 1997. Instead, it’s shooting for a package of measures that would protect forests, verify emissions cuts and channel up to $100 billion a year into aid for poor nations struggling to cope with climate change.
Developing countries aren’t comfortable that the rich nations are doing what they’ve already promised to pare carbon emissions, Figueiredo said. What’s needed to protect carbon markets, he said, is “program of work, with dates -- shorter than two years” that give assurance that Kyoto’s limits will continue.
“We don’t need to have a decision of amending Kyoto at this conference,” Juan Manuel Gomez, a negotiator for Mexico, said at a briefing. “At the latest, it has to be done six months before that period expires.”
The 1997 Kyoto treaty required industrial nations to cut emissions during a period that ends in December 2012. Yesterday, the UN asked Brazil and the U.K. to help defuse the dispute about Kyoto’s future, which China and India said threatens progress in other areas of the talks.
“A two-year timetable is more realistic than one,” said Mauricio Bermudez-Neubauer, lead consultant on carbon markets at Accenture, which is advising the Mexican government on climate change. “There is still so much to do.”
While Kyoto’s limits were legally binding on the countries that ratified it, the U.S. never joined the program, and developing nations had no requirement to make reductions. When last year’s talks in Copenhagen failed to produce a treaty, the U.S., European Union and China adopted a voluntary package of cuts outside the UN process. The EU wants to bring those under the UN umbrella.
Christiana Figueres, the UN envoy leading the talks, said this meeting won’t solve the disputes over Kyoto and that after the talks in Copenhagen collapsed last year the goal is to rebuild the credibility of the process.
“Cancun will not guarantee a second commitment period, but it will not kill the hopes of a second commitment period,” Figueres said in a speech on Dec. 4. “We need to build the foundation, the basement upon which we will then continue. This is absolutely a minimus agreement” that “is going to be frankly pathetically insufficient. We are just barely, barely scratching the surface of what we need to do.”
A UN document published Dec. 4 outlining possible goals for the Cancun meeting didn’t include ways to create demand for carbon credits. The text includes three options for raising rich-nation targets and four ways to spur actions by developing nations.
The rich-nation targets in the Kyoto negotiation text range from 15 percent below 1990 levels in 2020 to 50 percent below by 2017, according the document posted on the website of the United Nations Framework Convention on Climate Change.
The EU wants firmer targets drawn up in a process that would start at the end of this week’s talks.
If Cancun brings transparency and quick implementation of UN carbon market regulations, “then this could be very encouraging for the carbon market,” said Steve Abrams, head of implementation at JPMorgan Chase & Co’s EcoSecurities unit, which develops emission-reduction projects.
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