Norway floats idea of 'carbon auction' to fight global warming

11 December 2007

NUSA DUA, Indonesia (AFP) — Norway's finance minister on Tuesday proposed a fresh plan to battle climate change by auctioning off permits to emit CO2 and using the profits to help poor nations cope with global warming.

Kristin Halvorsen said that a global cap should be put on how much polluting greenhouses gases can be spewed into the atmosphere to help stabilise these emissions at a safe level.

That amount would then be divided up among the world, with individual countries agreeing to their own share.

A small amount of emissions would be held over and auctioned to rich nations to help them meet their needs, the proceeds of which would help poor countries adapt to climate change, said Halvorsen.

"If you implement a quota system, you can withhold a small portion for auction, and then maybe the UN or some other international organisation gets the revenue from this auctioning, and then finances adaptation for poor countries," Halvorsen told AFP.

She put her proposal to a forum of finance ministers and economic officials on the sidelines of a United Nations gathering looking to lay out a roadmap to deepen action against climate change.

She said the suggestion was well received, but added that the finance ministers meeting was only the start of a long process to hammer out economic solutions to one the biggest challenges facing the world today.

"One of the most important challenges of this conference ... is how to distribute money from the rich countries to the poor," she said.

Poor countries say that the industrialised nations -- which climate scientists say were historically responsible for most of the greenhouse gases in the atmosphere -- should pay for the knock-on effects around the world.

Under the present format of the Kyoto Protocol, there is no global ceiling on carbon emissions.

Instead, industrialised countries that are parties to the 1997 accord agree to their own, individual, targets for pollution.

They can use emissions trading to achieve these goals. Some of the proceeds from one of these trading schemes, the Clean Development Mechanism (CDM), are to be channelled into a so-called Adaptation Fund for poor countries.

The Bali talks aim at forging a consensus on how to tackle climate change under the UN Framework Convention on Climate Change (UNFCCC) after Kyoto's current roster of pledges expires at the end of 2012.

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