The European Union’s ambition to create a carbon market embracing 33 nations in the Organization for Economic Cooperation and Development within five years is infeasible, according to Climate Strategies.
“By 2015 an OECD-wide carbon market is not going to happen,” said Richard Folland, managing director at Climate Strategies, a group of climate policy specialists based at Cambridge University in the U.K. “But progress can be made toward harmonization over the longer term.”
Emissions-trading systems in various countries can be harmonized through fungibility of credits, assisted by bilateral and regional policy cooperation, Folland told a Platts seminar in Brussels today.
The EU carbon market, set up in 2005, is the world’s largest emissions cap-and-trade program. It covers about 12,000 facilities that produce energy or goods ranging from paper to cement, requiring them to have an allowance for each metric ton of CO2 they let off.
“Countries looking to introduce carbon trade may learn from the European experience,” Folland said.
