Climate Policy | International Updates

Some recent international climate policy developments – An overview.

The Australian Government plans to introduce a price on carbon in form of a carbon tax from July 1, 2012. The corresponding report is due for release next week. The proposal includes details on a fixed price scheme with a financial assistance system for energy-intensive and/or trade-exposed industries (EITEs). Debate around the scale and scope of EITE compensation and national emission targets is to be expected.  Last week’s report on Australia’s annual emissions shows that, without action, emissions are projected to be 24 per cent above 2000 levels.

In December, Japan delayed the implementation of its proposed national emissions trading scheme, over fears of job losses and international competitiveness. Japan is the world’s fifth largest emitter of greenhouse gases. A mandatory Tokyo metropolitan trading scheme is in place since 2010. Japan has also announced plans to develop an alternative to the Kyoto Protocol, claiming the existing framework does not include major emitters.

South Korea will commence its emissions trading scheme between 2013 and 2015, after opposition from influential business groups to start the scheme in 2013. The South Korean ETS would cover about 60% of national greenhouse gas emissions and become the second largest ETS in the Asia-Pacific region after New Zealand’s.

The European Union is revising its energy strategy which may result in putting it on track for a 25% reduction in greenhouse gas emissions by 2020 – 5% more than its existing 20% target. Emissions of greenhouse gases from EU businesses participating in the EU Emissions Trading System (EU ETS) fell 11.6 % in 2009 compared with a 2008, according to the information provided by Member State registries. Also, the EU will ban CDM credit (CERs) imports linked to hydrofluorocarbon- 23 and some nitrous oxide projects as of May 2013 in an effort to improve envrionmental integrity and geographical distribution of abatement efforts.

The UNFCCC has restored Bulgaria’s accreditation for participation in the trading schemes under the Kyoto Protocol and the EU ETS. The country had been suspended last year for violating greenhouse reporting rules. Bulgaria’s report to the UNFCCC was regarded as not sufficiently transparent and not trustworthy. It is assumed that it was only one person dealing with the country’s reporting to the UN.

In Taiwan, the EPA announced an early action crediting plan and a carbon offset program as part of a cap-and-trade scheme. As the Greenhouse Gas Emissions Reduction Act, a legal prerequisite for a full-fledged emissions trading program, still awaits legislative approval, the EPA decided to implement these administrative measures to encourage local industries to cut carbon emissions.

India will launch its Perform, Achieve and Trade system, a mandatory energy efficiency trading scheme, in April this year. Trading is to commence in 2014. The aim is to enhance cost effectiveness in improving industrial energy efficiency under the National Mission on Enhanced Energy Efficiency.
 The scheme will cover facilities that account for more than 50% of the fossil fuel used in India, and is expected to reduce CO2 emissions by 25 million tons per year by 2014/15. India already has in place a carbon tax on imported and domestic coal.

In the US, the Western Climate Initiative intends to commence its regional emissions trading scheme in 2012. It will comprise approximately two-thirds of total emissions in the WCI jurisdictions. When fully implemented in 2015, the program will cover nearly 90% of the GHG emissions in WCI states and provinces. The WCI will be the third regional trading scheme in the US, alongside the Regional Greenhouse Gas Initiative and the Midwest Greenhouse Gas Reduction Accord.

China’s latest Five-Year Program will include plans to create a carbon market that is likely to emerge as the world’s largest emissions trading scheme. The government announced that it will include targets to curb carbon dioxide emissions and energy consumption in its new plan, which will run from 2011 to 2015.