Page last updated at 07:36 GMT, Thursday, 18 September 2008 08:36 UK

UK seeking CO2 trading increase

By Roger Harrabin
Environment analyst, BBC News

Coal power station chimney
The amount of CO2 at stake "equates to 34 extra coal-fired power stations"

The UK government wants the right to buy its way out of half its CO2 reduction targets, according to a leaked document.

It says EU nations should be allowed to trade away 50% of their emissions reductions - up from the 30% currently allowed by the European Commission.

Defra said the details need finalising but the deal would help clean energy projects in developing countries.

But environment groups say some of the schemes would have gone ahead anyway.

European nations are currently expected to make around 70% of their carbon reductions on home turf, leaving 30% available for trade.

Reducing that domestic obligation to 50% could allow an extra billion tonnes of CO2 into the atmosphere, according to WWF.

Environmentally it does not matter where emissions reductions take place
Leaked government document

The dispute centres on the credibility of the system used for trading international carbon permits - the Clean Development Mechanism (CDM) - arranged under the Kyoto Protocol.

It allows rich countries to offset some of their emissions reductions by purchasing carbon credits which help developing countries get clean technology.

Carbon trading is widely accepted in principle as it does not matter where in the world CO2 is cut because its warming potential is global.

'No saving'

In practice the CDM is under fire because some investors are obtaining credits for clean energy projects in countries like China and India that would have been built anyway, meaning that no CO2 is saved overall.

Various reports suggest that between 20% and 60% of CDM projects do not save additional CO2.

Even so, the leaked document (a so-called "non-paper", discussed between government departments but not yet stated policy) argues: "There are many good reasons why we should support increased access to project (CDM) credits.

"[It will] deliver substantial financial flows to developing countries and will also play a key role in any international deal.

Windfarm in China
Many projects funded by carbon trading "would go ahead anyway"

"Environmentally it does not matter where emissions reductions take place.

"[The CDM] provides member states with a cost-effective means to meet their obligations and is an important flexibility mechanism."

It admits: "The commitment from developed countries in making emissions reductions is a critical part of reaching an international deal," and says "the use of flexible mechanisms must be supplemental to domestic action".

But it maintains that a 50% share is consistent with this goal.

A spokeswoman for Defra said: "Everyone recognises that in order to achieve a global reduction in CO2 significant cuts in emissions will have to be made.

"It is clearly sensible to do this as cost effectively as possible whatever country these reductions are made in.

"The CDM helps to do this by encouraging clean technologies in the developing world by use of project credits."

She added the UK wanted to see a significant reduction in the number of emissions it produced but the EU was still finalising agreements around this.


Dr Keith Allott, head of WWF-UK's climate change programme, said: "This is an appalling proposal from the UK.

Deciding how much CO2 should be traded is not an exact science - it's a matter of judgement
Peter Ainsworth,
Tory environment spokesman

"Already the CO2 targets aren't nearly strict enough to avoid the risk of dangerous climate change as defined by scientists. This would weaken the effort even more.

"If governments and companies know they can trade away their responsibilities they will just take their foot off the pedal. We are claiming leadership… this hardly sounds like leadership does it?

"The difference between what the EU are proposing and the UK are proposing is equivalent to 34 extra coal-fired power stations in Europe."

Peter Ainsworth, Conservative environment spokesman said: "Deciding how much CO2 should be traded is not an exact science - it's a matter of judgement.

"But we feel that we should be making around 70% of our emissions cuts on home territory - if it drops to a half then we are really not sending a signal to the rest of the world that we are taking it seriously."

However Professor Philip Stott, a left-wing climate change sceptic, supported the UK government's stance in principle.

"If we could be sure the CDM was delivering genuine CO2 savings, we should be prepared to offset 100% of our emissions if we are concerned about the poor and climate change," he said.

"There is a need to provide finance to get the best technology to developing countries."

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