A significant advance towards an international greenhouse gas emissions market is expected to be made next week in Chicago, USA. More than 50 senior policy-makers and corporate executives from different regions of the world will meet on 19 and 20 June to inaugurate a Policy Forum on Greenhouse Gas Emissions Trading.
Its purpose will be to provide timely institutional support to interested governments, corporations and non-governmental organizations (NGOs), for the development and implementation of the initial-phase of an international greenhouse gas emissions market. The target date for launching the emissions market is set for early 2000.
The meeting reflects the joint commitment of governments and the private sector to protect the environment and promote sustainable development.
Convened under the auspices of UNCTAD and the Earth Council, an international NGO established after the 1992 Earth Summit (UNCED) to advance sustainable development, through the empowerment of the civil society, it will be chaired by the Earth Summit´s chairman, Mr. Maurice Strong. The event will be hosted by the Chicago-based firm Centre Financial Products Limited, headed by Dr. Richard L. Sandor. Professor Ronald Coase, Nobel laureate in economics (1991) will deliver the keynote address.
Government authorities from the following countries will participate: Brazil, Canada, Costa Rica, Germany, New Zealand, Norway, Poland, Russian Federation, The Netherlands, United Kingdom and United States of America. Officials from Argentina, India and Switzerland will also participate. Corporate executives will come from: British Petroleum, Niagara Mohawk, Ontario Hydro, Norsk Hydro, British Gas, National Power, Powergen, CNA Insurance Company, Wisconsin Electric Power Company, and Katten, Muchin & Zavis. The World Bank and Greenpeace, the international environmental NGO, will also participate.
Reducing CO2 emissions through a trading system: the problem, and a potential solution
It is now universally agreed that rising emissions of greenhouse gases trap heat within the earth´s atmosphere, causing potentially far-reaching changes in the earth´s climate system, with long-term economic consequences. Developed nations have already agreed to take measures to limit their emissions. And, in Kyoto (Japan) in December 1997, they will consider what further steps they are willing to undertake.
One approach, which has been successful in the United States as a cost-effective means of lowering acid rain, has been to establish a "cap" on emissions in line with environmental goals, and then to issue permits to companies to enable them to emit up to that capped level. Companies that succeed in holding their emissions below the legislated cap are able to sell the spare capacity allowed by their permits to other companies looking for cost-effective solutions.
UNCTAD is convinced that using a similar approach to address greenhouse gas emissions globally could produce "win-win" outcomes for interested parties: faster improvements in the global environment, the active and self-interested involvement of the private sector, and the transfer of both environmentally friendly technologies and finance to developing countries and countries with economies-in-transition.
The launching of the Policy Forum at this time is intended to send a strong message of support to governments participating in the negotiations on a protocol to the Framework Convention on Climate Change for the use of market-based instruments to deal with the costly threats posed by climate change. International greenhouse gas emissions trading could substantially cut abatement cost while opening up new economic, financial, and business opportunities for developing countries and countries in transition.
The setting-up of the Policy Forum is an outgrowth of more than six years of research by UNCTAD into the design and implementation of an international greenhouse gas emissions trading system (published in seven volumes between 1992 and 1996).
The Forum is expected to meet again in October 1997 to agree on the steps needed to establish the emissions trading system.
