Ray of hope from Paris, big business seeks CO2 emissions price

CO2

For the most part, large businesses wanted one thing from the climate agreement in Paris on Saturday: compensation on carbon dioxide (CO2) emissions. While outwardly their hopes were dashed, searching inside may give them a reason for hope.
Almost all multinational companies starting from oil giant BP to consumer guru Unilever have sought for an internationally settled way of pricing emissions of CO2 — the gas mainly blamed for global climate change through warming — to build an incentive for factories and power plants to take initiative for cleaner forms of energy.
The big oil-exporting countries such as Saudi Arabia and others like Bolivia oppose this, and they are reluctant to comply with any market-based resolution.
But Saturday’s landmark accord in Paris added an awkward reference to what some analysts assume could ultimately build a bridge to a global CO2 emissions trading instrument.
The obligatory part of the agreement, for the almost 200 nations that agreed to it, allows countries to use “internationally transferred mitigation outcomes,” which could permit nations on a voluntary basis to compensate their own CO2 emissions by purchasing credits from the other nations.
Analysts said this might lead to a tie-up between the world’s biggest market for CO2 emissions permits: the European Union’s Emissions Trading System (ETS) and China’s planned scheme set to be commenced in 2017, which will surpass it in size.
The reference is “critical in the framework of the potential establishment of a crediting mechanism and to some extent to assist future potential emissions trading schemes linkages,” said Yann Andreassen, senior analyst at ICIS Tschach Solutions.
It is improbable to happen as quickly as some business sectors say they want it.But shortly after the agreement, French President Francois Hollande said he would seek to erect a coalition of countries that sought after a CO2 emissions price.
The Paris accord’s only straight reference to “carbon pricing” was mentioned in a non-binding, political section of the text, where the countries “identify the vital role of rendering incentives for emission reduction programs, including tools, like domestic policies and carbon pricing.”
Stronger statements in the internationally agreed deal would have shattered a fragile consensus, delegates said.
Canada’s environment minister Catherine McKenna said in Paris some countries were opposed to any role for markets in facing the climate change.
“Many countries opine that markets have a role to play and whether or not the words are reflected in the accord, there will continue to be a role for the markets,” she added.
Jeff Swartz, policy director at the International Emissions Trading Association (IETA), said that demonstrated CO2 emissions pricing would boost apart from of the final Paris agreement.
“I believe we are going to witness a multitude of approaches to CO2 pricing. Some of this will occur at this process and some will happen outside,” he said.
The EU’s ETS — where CO2 emissions permits are fading away at around 8.50 euros per ton —is not, however, expected to immediately react strongly on Monday morning, traders said.

Be the first to comment on "Ray of hope from Paris, big business seeks CO2 emissions price"

Leave a comment

Your email address will not be published.


*


Time limit is exhausted. Please reload the CAPTCHA.