Australia can accept United Nations emission offsets in its planned carbon market through 2020 and potentially beyond because it’s already signed up to the 1997 Kyoto Protocol, said one of the nation’s climate negotiators.
“We’re a party to the Kyoto Protocol, no matter what happens with the second commitment period,” said Robert Owen-Jones, assistant secretary of multilateral negotiations at the Australian government’s climate change department in Canberra. The potential extension of Kyoto targets beyond 2012 and rules governing the creation of offset credits were separate articles of the agreement, he said today in an interview at Carbon Expo in Cologne, Germany.
Australia’s demand for offset credits in the five years through 2020 may be about 350 million metric tons, according to a forecast by Bloomberg New Energy Finance in London. UN Certified Emission Reduction credits for 2013 dropped to a record 3.63 euros ($4.51) a ton on May 30 on the ICE Futures Europe exchange in London on expectations of flagging demand and rising supply. They traded at 3.67 euros at 3:21 p.m. today.
“Even if Australia does not sign up to a second commitment period of the Kyoto Protocol, we expect it continue to purchase CERs out to 2020,” Andrea Du Rietz, an analyst at Bloomberg New Energy Finance in Stockholm.
The UN expects Australia to decide this year whether it will join an extension of the protocol planned for at least five years starting 2013, Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change, said May 30 at the conference.
“The world needs to know if Australia is in,” she told reporters. A possible second phase of the Kyoto protocol will start next year, potentially including the European Union.
Australia may decide this year or afterwards, Owen-Jones said today.
“It’s a serious obligation,” he said. “It’s for government and cabinet, certainly not for me. We will be in Kyoto, whatever happens.” He declined to comment on the government’s legal advice, saying it was privileged.
Australia was waiting for clarity on at least two issues before deciding to participate on the Kyoto target extension, Owen-Jones said. One was whether the period would be five or eight years. The other was more certainty about what happens to the surplus Assigned Amount Units from the first period, the five years starting 2008. The UN handed out to nations in the first period an AAU for each ton of carbon dioxide equivalent in their greenhouse gas targets.
Australia was “deeply embedded” in negotiations for a broader climate pact that will cover all nations starting around 2020, Owen-Jones said.