A United Nations scientific body was sensible to give its first estimate of the amount of greenhouse gases that can be emitted before temperature gains exceed a target level, according to Richard Sandor.
The Intergovernmental Panel on Climate Change said last week that there is enough space in the atmosphere for 309 billion metric tons of carbon, or about 22 years of emissions, for a chance to prevent runaway climate change. The report may encourage nations including China and India to tackle output more quickly, Sandor, founder of the world’s biggest carbon trading exchange in Europe, said in a London interview.
India and China are among nations building out environmental markets as they balance the need for economic growth and climate protection. The European Union market, founded in 2005, is the world’s biggest. History shows financial markets take about 20 years to establish themselves, according to Sandor, who helped invent interest-rate futures in Chicago before founding the London-based European Climate Exchange in 2003.
“You need a certain amount of economic prosperity before you can turn your attention to environmental issues,” Sandor said yesterday. Carbon markets are “going to come faster than you think.”
About 531 billion metric tons of carbon have been emitted by burning oil, coal and gas, cutting down forests and making cement since 1750, the IPCC said last week. Capping total greenhouse gas output at 840 billion tons gives a 50 percent chance of meeting the 2 degree Celsius (3.6 Fahrenheit) target, it said in its first such estimate. In climate talks, envoys have agreed to try to keep temperatures from rising 2 degrees to avoid the worst heatwaves, flooding and droughts.
Global emissions in 2020 will be at least 52 billion tons of carbon-dioxide equivalent, or 18 percent more than the 44 billion-ton limit needed to meet the 2 degree target, the UN said in a report on Nov. 21.
The 309 billion tons of carbon left is equivalent to about 1.1 trillion tons of carbon dioxide. Using the UN forecast for 2020 output, that would give the atmosphere space for about 22 years of emissions.
“A budget with a reasonable chance of staying under 2 degrees would be exhausted by 2040 if we carry on as we are,” Byrony Worthington, director of Sandbag Climate Campaign, a London lobby group, said today by e-mail. “It means roughly half of known fossil fuel reserves have to stay in the ground or be fully captured and stored.”
The U.S. may introduce a cap-and-trade carbon market by about 2020, Sandor predicted in November. He sold his exchange to Intercontinental Exchange Inc. in 2010 in a deal valuing it at 395 million pounds ($640 million).