UN Should Consider Shifting Emissions Market, Shell’s Hone Says

David Hone, climate adviser at Royal Dutch Shell Plc (RDSA) and chairman of the International Emissions Trading Association, speaks about the future of the Clean Development Mechanism, the world’s biggest greenhouse gas offsetting market.

He was speaking in interviews last month in London, ahead of climate talks in Durban, South Africa, through Dec. 9. He said his comments were personal and did not necessarily reflect the views of Shell or IETA, the Geneva-based lobby group.

On how the CDM’s legal structure might be shifted under the UN Framework Convention on Climate Change from under the 1997 Kyoto Protocol:

“The CDM needs to continue, even though there may be a lack of agreement on the target issue. It needs to be a viable mechanism that countries can use. The Durban meeting could move the CDM out of Kyoto and underneath the convention. Then it becomes a toolkit that is usable by the Kyoto Protocol but also as a crediting mechanism for Nationally Appropriate Mitigation Actions under the long-term co-operative action strand. If it were me, that’s what I would do.”

The legal framework for making the transfer may not be easy to put together, Hone said. It may not be easy to win support from all nations for the transfer, he said.

“Moving it into the main game makes it a tool, for example, that the emissions trading system in California could consider using rather than going on to reinvent its own.”

On the future of the CDM after Kyoto targets expire next year:

“Both IETA and Shell want to see a resolution on the CDM such that it has new life and neither want that to be dependent on the whole resolution of Kyoto. IETA does not yet have a view on exactly how this can happen but is currently looking at the possible legal options available within the UNFCCC process to do something. Shell has not formulated a view on exactly how a CDM rescue could be implemented. But I stress that both want something to happen.”

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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