Global Carbon Markets in Discord as Emissions Projections Rise
Just as the United States warns that global carbon dioxide emissions may rise 39 percent by 2030, there appears to be discord as to whether the U.S. and the European Union will be able to integrate carbon trading markets.
With demand from non-developed countries like China and India using a presumed 73 percent more energy between 2006 and 2030, global energy demand could jump 44 percent, according to reports from the U.S. Energy Information Administration.
By 2030, global carbon emissions may rise to 40.4 billion metric tons, compared to 29 billion tons in 2006. Liquid energy demand, including gasoline, would reach 107 million barrels a day by 2030, up from 85 million in 2006.
It should be noted that these projections are based on no legislative changes to cap emission levels or other initiatives to reduce the use of fossil fuels.
Meanwhile, European carbon traders cited the difficulty in alligning the European Union’s emissions trading program with a U.S. cap-and-trade scheme, reports Reuters.
The EU hopes to have a linked global carbon market by 2020. By 2013, the EU would like to see national schemes in all countries belonging to the Organization for Economic Cooperation and Development (OECD), with those linked together by 2015.
The main challenge is in developing systems that are compatible, said David Corregidor, deputy director of environment and climate change at Spanish power utility Endesa.
Additional hurdles include the existence of carbon price caps in the U.S. market, while the EU has none. Also, nations differ on preferred trading units and emissions reductions targets. The bill in the U.S. House calls for 17 percent cuts by 2020, compared to 2005 levels. By 2020, the EU looks to reduce emissions to 21 percent below 2005 levels, however.
To help prevent an extreme rise in emissions from developing nations, it has been floated that rich nations donate a collective $100 billion into a fund to promote the transition to renewable and clean energies in poorer nations, reports Red, Green and Blue.
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