How About a Global Carbon Labelling Law?

The Copenhagen round of talks aimed at building a consensus about the features of the next climate treaty is scheduled to take place this December however, there seem to be no signs of consensus over how the world should proceed to reduce its carbon emissions. Which tool would be most effective? Clean Development Mechanism, a global carbon tax or maybe a global carbon labelling law?

Clean Development Mechanism has been tried, tested and, well, has been branded somewhat ineffective by not only the people outside the system but the people who are actually a part of it, the United Nations Framework Convention on Climate Change (UNFCCC). Bureaucratic delays, procedural wrongdoings in approval of projects and failure to make any difference at the grass-root level are some of the well known problems with this scheme.

The European Union has proposed that the CDM be replaced by a global carbon tax. United States saw a national carbon tax bill introduced in the Congress. The bill calls for levying an ‘carbon equivalency fee’ on imported products, in addition to the nationwide carbon tax in order to neutralize the losses incurred by domestic manufacturers. China has opposed this move saying that the developed countries are in part responsible for the emissions as they are the end users.

China Opposes US Plans to Levy Carbon Tax on Imported Goods

With fears of being pressurized to agree to mandatory emissions cuts under the new climate treaty, China has up the ante and is looking to hit back at the developed countries by holding them accountable for a size-able portion of its carbon emissions. According to a recent study, 15 to 25 percent of China’s carbon emissions originate from manufacturing of goods exported to developed countries.

The Director of China’s Climate Change department, Gao Li,  has said that since the western countries are these final users of the carbon intensive products they should share the responsibility for the same with the Chinese government. Mr. Li also said that sharing equal responsibility was essential to reach any fair agreement over reducing the carbon emissions.

These statements came almost a week after a carbon tax bill was introduced in the US Congresswhich called for levying an ‘carbon equivalency fee’ on imported products, in addition to the nationwide carbon tax in order to neutralize the losses incurred by domestic manufacturers. The bill, if passed, would also allow the US government to withhold revenue generated from the equivalence fee till the time the producer nation agrees to a domestic carbon tax of its own. 

Al Gore Hopes Obama’s Radical Measures Would Bring the World Closer to Climate Deal

Al Gore in a scene from his documentary An Inconvenient Truth

Speaking at the International Climate Change Congress, the former US Vice President and imminent environmental activist Al Gore expressed hope that a broad consensus on a new and ground-breaking climate deal would be reached soon. Al Gore pointed out the new steps initiated by the current US President Barack Obama, to promote renewable energy and reducing carbon emissions, as one of the main reasons for an emerging possibility of successful negotiations for a new climate deal. 

President Obama has been quite aggressive in breaking away from the policies of his predecessor, President George W. Bush. His administration has answered to the critics of United States’ climate policy (or the lack of it!). No doubt the confidence among the environmental activists, like Gore, is high given the revolutionary measures announced by President Obama. 

The European Union has been eagerly waiting for some kind of cap and trade scheme from the United States so that the much needed credit to finance the technology transfer from developed nations to poor nations could obtained. 

The European Union is also looking at the United States to pass a carbon tax bill which eventually could form the foundations of a global carbon tax effective enough to replace the current Clean Development Mechanism of offsetting carbon emissions. A national carbon tax in the United States would put pressure on rest of the world and especially the advanced developing countries like India and China to agree to a global carbon tax, and possibly mandatory emission reduction targets. 

The Obama administration has also pledged billions of dollars of investments in renewable energy in the form of direct infrastructure spending in building wind farms and solar power plants, tax rebates to families who wish to install solar panels and in research & development of new and affordable forms of renewable energy. 

The steps taken by the United States may very trigger steps from the European Union to adopt stricter carbon emission reduction targets potentially laying foundations of long-term targets. 

For the first time in almost a decade the United States has acknowledged its responsibility as being the one of the largest polluters in the world. India and China have long accused United States of being negligent towards its duty to act decisively on critical environmental issues. Now that the times have changed the pressure to act is now on the developing nations.

Image: Juampe López (Creative Commons)

Europe Argues Over Funding Emission Reduction Projects in Poor Countries

The European Union is in a tussle over how the emission reduction goals be set under the next climate treaty, discussions for which are scheduled to talk place at Copenhagen in December this year.

Two ways put forward are

money raised through the auction of pollution permits in carbon markets around the world, or a mechanism whereby funds are levied according to a country’s economic strength, population growth and emissions.

Many EU nations like Poland are opposed to any strict emission reduction goals. Poland which has vast reserves of coal has made it clear that it would oppose decision which could hamper its efforts to tap its coal reserves.

“We’re against the subsidy plan, we’re open to talks, but the proposal will have to be changed if it’s to win our agreement”, said Polish Environment Minister Maciej Nowicki. Poland also has protested a separate EU plan to tighten emissions-trading rules that would boost costs for coal-burning power generators.

Poland is unwilling to either buy emission rights or pay taxes for carbon emissions generated by its coal-powered energy plants.

EU has also put forward a plan wherein the Clean Development Mechanism is to be replaced by carbon tax which would be levied on the developed (and possibly ‘advanced’ developing nations) for exceeding emission limits set under the new climate treaty.

Developing countries like India and China are opposed to any mandatory emission cuts and want developed countries to adopt stricter emission reduction goals as they have a ‘historical responsibilty‘ to the state of the current state of the environment. 

The European Union is also eyeing the cap-and -trade scheme announced by President Obama. 

It would be interesting to see how the European Union assembles the financial resources to make the emission reductions globally effective.