Japan Adviser Nishimura Proposes $6.3 Trillion Carbon Market for Climate
Mutsuyoshi Nishimura, Japan’s chief climate-protection negotiator during the three years through 2008, proposed a $6.3 trillion carbon market to kick-start stalled talks.
The world could sell 250 billion metric tons of carbon- dioxide allowances to emitters in the 10 years through 2020, generating “a huge chunk of new wealth” that could help poor nations cope with the impact of global warming and other needs, Nishimura said yesterday in an interview at United Nations talks in Cancun, Mexico. He handed to Bloomberg an 11-page 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 proposal is not yet supported by Japan, nor any other nation, he said.
Under the plan, governments would divide up 660 billion tons of allowances through 2050. In the first phase, the 250 billion tons could be sold potentially at $25 each. The incentive of the cash would prompt governments to overcome differences and settle on a global peaking year for emissions and a distribution of 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 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 carbon-dioxide 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 today initiated a partnership with nations to raise $100 million for the investigation of new carbon markets, speeding 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.
Today’s launch of the initiative was attended by representatives of Japan, the European Union, Indonesia, Australia and South Africa. The European Commission will contribute 5 million euros ($6.3 million) to the partnership, said Peter Wehrheim, a commission climate official.
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