Carbon group seeks to open U.S. to global offsets
NEW YORK (Reuters) - A greenhouse emissions business group hopes to shape U.S. climate change legislation to include broad use of international carbon offsets, like wind and solar power farms in developing countries, that are not currently in the leading climate bill.
In a letter sent on Wednesday to Rep. John Dingell, a Michigan Democrat, the International Emissions Trading Association, a carbon business group, said clean project offsets encourage developing countries to participate in international carbon markets, leading to "greater climate protection at lower cost."
Dingell, the chairman of the House of Representatives Energy and Commerce Committee, said in January he hoped to draft climate change legislation as soon as possible.
In greenhouse gas markets, polluters can buy credits representing emissions reductions in order to meet limits mandated by governments where they operate. They can buy those credits from companies who have cut emissions or ones generated by clean project offsets.
Offset sellers are worried about the future of the market after the European Union's Executive Commission proposed in January a freeze on such sales into the EU's emissions trading scheme, which is currently the biggest emissions market.
The United States, by most counts the world's top greenhouse gas polluter, does not regulate heat-trapping emissions. President George W. Bush pulled the country out of the Kyoto Protocol on global warming early in his first term, saying it unfairly left rapidly developing countries without emissions limits.
Rich and poor countries alike are participating in two years of U.N. talks to launch a climate treaty to widen the Kyoto Protocol, with commitments for all nations, including developing countries like China and India.
Some groups, including many environmentalists, have opposed emissions offsets, saying that the quality of the reductions is hard to monitor.
But others believe the quality of offsets has been regulated well through methods used by the U.N.'s Clean Development Mechanism program and expect that offsets offer ways to lower the costs of cutting emissions blamed for warming the planet.
Milo Sjardin, the North American head of energy consultant New Carbon Finance, said last month that opening a future U.S. carbon market to international offsets could reduce the cost of emissions reductions for average Americans by about $480 per year.
The leading climate bill in Congress, sponsored by Sens. Joe Lieberman, a Connecticut Democrat turned independent, and John Warner, a Virginia Republican, limits polluter use of international emissions allowances, like those traded on international exchanges, to 15 percent of the required reductions. The bill would create a board to study the market for ways to keep costs down, which could include offsets.
For additional stories and commentary on global carbon markets please visit www.reutersinteractive.com/carbon.
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