Dec. 9 (Bloomberg) -- Mutsuyoshi Nishimura, Japan’s chief climate-protection negotiator during the three years through 2008, proposed a $6.3 trillion carbon market to advance talks that have stalled since 1997.
The world could potentially sell 250 billion metric tons of carbon-dioxide allowances to emitters in the 10 years through 2020 or a later timeframe, generating “a huge chunk of new wealth” that could help poor nations cope with global warming and other needs, Nishimura said yesterday in an interview at United Nations talks in Cancun, Mexico. He handed to Bloomberg a document outlining the plan.
“The key part is to cap globally and sell allowances to all corporations,” said Nishimura, who now advises the Japanese cabinet on climate matters. His personal proposal is not supported by Japan, nor any other nation, he said.
Under the plan, governments would divide up 660 billion tons of allowances through 2050. That’s the amount of carbon dioxide equivalent available for emission if the world is to prevent temperatures from rising 2 degree Celsius (3.6 Fahrenheit), based on scientific research, Nishimura said.
In the first phase, the 250 billion tons could be sold at $25 each. The incentive of the cash would prompt governments to overcome differences and agree on the year when global emissions should peak and how to distribute allowances to each nation.
“The ultimate payment is going to be made by households” consuming goods and services that require fossil-fuel combustion, Nishimura said. “There would be a single carbon price.”
Nations would hypothetically sell 200 billion tons in the 10 years through 2030, 150 billion tons in the decade after and 60 billion tons in the final phase of the 40-year program, according to the plan. International negotiations on the plan might delay its start until about 2020, he said.
The U.K. is already setting carbon budgets. The nation should commit to a 60 percent reduction in emissions by 2030 from 1990 levels to meet its targets for 2050, that country’s Climate Change Committee said Dec. 7.
This would mean tightening targets through 2020, the committee said, adding that proposed emissions reductions can be achieved at a cost of less than 1 percent of gross domestic product.
The U.K. has pledged to get 15 percent of its energy from renewable sources by 2020 and reduce carbon-dioxide by 80 percent from 1990 levels by 2050. Achieving this will require as much as 40,000 megawatts of low-carbon energy projects and a “radical reform” of the electricity markets, the group said.
The World Bank started today a partnership with nations to raise $100 million to study new carbon markets and speed climate protection, said bank President Robert Zoellick.
New Carbon Markets
Participants include the U.S., which will contribute $5 million, said Billy Pizer, a deputy assistant secretary in the U.S. Treasury Department, at climate talks in Cancun, Mexico. At least $30 million has been raised for the partnership, said Joelle Chassard, manager of the bank’s Carbon Finance Unit.
The EU will contribute 5 million euros ($6.3 million) to the partnership, said Peter Wehrheim, a climate official.
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