23 January 2008

EU Must Control Kyoto Offsets from 2013-20 - Report

Reuter's Planet Ark - 23/1/2008

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BRUSSELS - The European Union should restrict the availability to heavy industry of cheap carbon offsets to 1.4 billion tonnes from 2008-2020, to meet its greenhouse gas emissions goals, a confidential EU document said.

The EU limits carbon emissions by energy-intensive industry but allows companies to meet targets by buying offsets from emissions-cutting projects in poor nations, under a Kyoto Protocol scheme, up to a cap of 1.4 billion tonnes from 2008-12.

If no global, post-2012 Kyoto deal is agreed, companies should only be allowed to use unused offsets in the next trading cycle from 2013-2020 -- keeping to the 1.4 billion tonnes cap -- the internal note from EU Environment Commissioner Stavros Dimas to other commissioners said.

The Kyoto cap implied that three-quarters of emissions-cutting effort by business to 2020 would have to be made within Europe, the note, seen by Reuters on Tuesday, said.

"Without an international agreement unrestricted supply of CDM (Kyoto) credits could be so abundant that prices of carbon could drop... and as a consequence lead to an increase in emissions," it said.

If a global climate deal were agreed, the offsets import cap should increase by 50 percent of the extra emissions-cutting effort that the EU agreed to under such a deal, the document said.

EU states can also buy offsets from developing countries, to help them meet their national emissions-cutting targets under the Kyoto Protocol.

In the event of there being no international successor to the Kyoto pact, the EU should restrict annual offset purchases by governments from 2013 to 3 percent of 2005 emissions, equal to one third of their emissions-cutting effort to 2020.

If a climate deal were agreed, EU governments should be allowed to increase imports similarly to energy-intensive business.

All Contents © Reuters News Service 2008

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