UN-backed carbon trading plan to cut greenhouse emissions moves closer to fruition

Initial reviews indicate that countries will meet criteria to implement an essential tool in efforts to reduce global warming gases with a trading mechanism that allows States which cut emissions below treaty targets to sell their surplus allowances to others who overshoot the mark, the United Nations body overseeing the project reported today.

International teams coordinated by the secretariat of the UN Framework Convention on Climate Change (UNFCCC) have finished reviews of reports from Austria, Japan and Switzerland on their preparations to work under the Kyoto Protocol, confirming that the Governments have put in place systems for calculating their emissions and tracking the results of their emissions trading. The trading system is set to begin in 2008.

“Kyoto requires that countries prove that they can track progress towards their emission targets and these reviews show that Governments are passing the test,” UNFCCC Executive Secretary Yvo de Boer said. “Austria, Japan and Switzerland are just the first reviews to be finished and we are expecting another 30 or so before the end of the year.”

The 1997 Protocol requires 36 industrialized countries to cut greenhouse gas emissions below country-specific levels, amounting overall to reductions of at least 5 per cent below 1990 levels between 2008 and 2012. It allows industrialized countries to meet their targets by trading emission allowances on a newly-created carbon market.

Some 175 countries have ratified the treaty, which entered into force in February 2005, but the United States, the world’s biggest emitter of greenhouse gases, has not.

International review teams have now visited 32 countries and examined their initial reports in detail, a process involving more than 200 Government-nominated experts. UNFCCC has set up the International Transaction Log (ITL), allowing industrialized countries that have signed up to the Kyoto Protocol to link their national registries to the central hub of a settlement system delivering traded allowances from sellers to buyers.

“The ITL is the international community’s safeguard that registries accurately track their allowances and work within the rules agreed for the Kyoto Protocol,” Mr. de Boer said. “Not a single allowance may ever be lost and none may be conjured out of thin air.”

Today’s announcement comes as Governments meet in Austria for the “Vienna Climate

Change Talks” to discuss more ambitious targets for the period after the Kyoto Protocol expires in 2012. The review process has so far confirmed around 6.5 billion emission allowances under Kyoto, out of the approximately 56 billion tons expected for all industrialized countries together.

“With such quantities of emission allowances in the Kyoto system, recording their whereabouts at all times is crucial to the integrity of the Protocol,” Mr. de Boer said.