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5th UNCTAD/Earth Council Policy Forum on Trade and Climate Change (Rio Policy Forum):
The State of the Greenhouse Gas (GHG) Market

29-31 August 2001, Rio de Janeiro, Brazil

 

The Summary report is available online n  HTML ball.gif (204 bytes) TEXT ball.gif (204 bytes) PDF

Web Archive:  29 Wed | 30 Thu | 31 Fri

Update for Thursday 30 August 2001:
 


Delegates to the Rio Policy Forum met in the morning for the official Opening of the meeting and heard opening remarks from Rubens Ricupero (Secretary General of UNCTAD), Maurice Strong (Chairman of Earth Council Institute), Paulo Protasio (Chairman of IETA), Minister Ronaldo Sardenberg (Ministry of Science and Technology) and Philippe Reihstul (Executive  President of Petrobras). In the afternoon and evening delegates continue to hear panel presentations. Left photo: The dias during the opening session 
Opening session:
The opening session of the Rio Policy Forum, which officially started on Thursday, August 30, was entitled “Climate Change, energy crisis and globalization” and aimed to address the questions how can bottom-up climate change initiatives converge with top-down negotiations and whether private sector and civil society need to wait for Governments to act. Mr. Lucas Assunção, UNCTAD (right), was the policy forum co-ordinator and chaired the event.
  Listen to Lucas Assunção's opening remarks in Real Audio 
Listen to Rubens Ricupero's opening remarks in Real Audio



The opening session on climate change, energy crises & globalization asked how can bottom-up climate change initiatives converge with top-down negotiations and whether the private sector and civil society need to wait for governments to act? These questions were echoed in the opening remarks of Rubens Ricupero (Secretary General of UNCTAD), Maurice Strong (Chairman of Earth Council Institute), Paulo Protasio (Chairman of IETA), Minister Ronaldo Sardenberg (Ministry of Science and Technology) and Philippe Reihstul (Executive  President of Petrobras). Listen to Maurice Strong's opening remarks in Real Audio
The Kyoto Protocol Negotiations: What next?

Keynote speaker Mr. Tahar Hadj-Sadok (right), Deputy Executive Secretary, Climate Change Secretariat (UNFCCC), highlighted developments made at COP6 Part II. Listen to Tahar Hadj-Sadok's presentation on post COP6bis

Powerpoint presentation in pdf format

Paul Fauteux (right), Canada, noted that of the four main issue clusters, Kyoto Mechanisms was the least elaborated in Bonn. He said Bonn provides clarity on the general framework for the Kyoto Mechanisms market. The level of clarity, at least with respect to Mechanisms, should be sufficient for Parties to make their ratification decision in the coming year, but resolution of operational details for the Mechanisms will take us to COP 7, and in some cases beyond. 
Listen to Paul Fauteux' presentation in Real Audio

 





Everton Vargas, Brazil, noted the emerging carbon market has far reaching consequences for many sectors of society. Not only does it present a new tool for environmental policy, it is also changing the nature of international relations. 
KEYNOTE ADDRESS:
Richard Sandor, Environmental Financial Products LLC (right), gave a keynote address. Sandor has gained first hand knowledge on how markets evolve and explained how the Acid Rain Trading Program in the United States, which started in 1990, represents the latest trend in the commoditization of natural resources. There is no inherent difference between the right to trade a ton of wheat and to trade the right to emit a ton of SO2. As long as the legal entitlements are well defined, emissions credits can be traded like any other commodity.
THE STATE OF THE GHG MARKET: VIEWS OF GHG OFFSETS IMPORTING COUNTRIES
This session, moderated by Gao Pronove, UNCTAD, considered the provisions for the purchase of project-based GHG offsets from abroad and the criteria and requirements for their trade within emerging national systems. A panel of European countries discussed their experiences with domestic emissions trading systems.




Peer Stiansen, Norway (right), said that while Norway does not have an emissions trading scheme yet, his country has started discussions on the merits of a national system. Norway attempted to levy an environmental tax on heavy industry, which is largely responsible for GHG emissions, but met much resistance.
Margaret Mogford, British Gas (right), spoke on her participation in the working group in the United Kingdom on setting up an emissions trading scheme. A pilot-scheme started off with 28 companies, several government ministries, brokers, and environmental NGOs. Companies started to accept the political reality that some form of climate change policy was inevitable and largely cooperated. The scheme is designed as a dual system.
Hans Sterh, Danish Ministry of Environment and Energy (right), explained that Denmark had an aggressive target to reduce CO2 emissions from power plants before the Protocol specified new targets. Under the EU burden-sharing agreement, Denmark has to reduce its GHG emissions to 21 percent below 1990 levels. Denmark�s emissions from power plants, the majority of which are coal-fired, are heavily influenced by its interconnections with other countries, particularly Norway. Norway is 99 percent dependent on hydro electricity, and in a dry year, such as in 1996, it must import electricity from Denmark.
Lex de Jonge, Netherlands Ministry of Housing, Spatial Planning and Environment (right), said The Netherlands must reduce its GHG emissions to 6 percent below 1990 levels. It aims to achieve these reductions through a combination of domestic cuts and use of the flexible mechanisms of the Protocol, mainly through the CDM. Only at a later stage will The Netherlands participate in an emissions trading scheme.
Jurgen Lefevere, Foundation on International Environmental Law and Development (right), spoke on the development of an EU emissions trading scheme, scheduled to be implemented in 2005. While he was not speaking on behalf of the EU, his organization is involved in the consultation process and was asked to speak on this topic. The exact scope of the EU system is still under consideration, and no formal proposals have been put forward, but the core of the several proposals that have been leaked suggest the scheme would be relatively straightforward. Initially, only larger emitters would be included, approximately 4,000 � 5,000 in total, covering only CO2 emissions.
PRIVATE SECTOR VIEWS OF GHG OFFSETS IMPORTING COUNTRIES:
This session, introduced by Andrei Marcu, IETA, considered the specific attributes of GHG offset projects that would attract private investment, the specific project characteristics that have attracted investment, and what motivates multinational companies to invest in GHG offset projects in developing countries.
John Mogford, British Petroleum (BP), discussed BP�s approach to climate change. He noted they first set an internal target in their operations and have learned much since. Since 1997, BP has reduced emissions by about 7.5%, using an internal cap and trade scheme. He noted BP�s influence in efficiency and substitution, policy debate involvement, research investment and learning by doing.



Paul Vickers, TransAlta, highlighted a chart showing the evolution of market instruments and noted their use in achieving environmental outcomes and the sophisticated body of knowledge on what already exists and works. He emphasized TransAlta�s high volume of CO2 emissions and noted they are developing renewables and other measures so that they don�t just rely on offsets.




Frede Cappelen, Statoil, noted GHG emission trends in Norway and highlighted Statoil�s profile, noting their efforts to find possible reductions throughout the business. He said there is currently no proposal for pilot emission trading Norway. On Statoil�s position on emission trading, he noted their management infrastructure is in place




Cindy Kohuska, SwissairGroup (left), highlighted the interface between the Kyoto Protocol and the aviation industry, and noted International Civil Aviation Organization (ICAO) recommendations as they relate to Kyoto. ICAO projects that emissions from the airline industry are set to increase significantly.
Bernt Rydgren, NRG (right), noted that NRG is the third largest independent power company in the world and highlighted their vision for the future in terms of high growth and responsibility. On expectations, he noted the Kyoto flexibility mechanisms provide win/win outcomes and stressed it all comes down to risk management. Dependability and the ability to forecast are key. He said that the risk factors were really the same as in regular business. Expectations of credits include that they be verifiable, guaranteed and tradable.

Rio Policy Forum related sites

bullet Official Rio Policy Forum web site: agenda and information for participants

bullet UNCTAD GHG Emissions Trading Project

bullet EARTH COUNCIL

bulletInternational Emissions Trading Association
bulletUnited Nations Framework Convention on Climate Change, UNFCCC LogoUnited Nations Framework on Climate Change web site: UNFCCC COP6-bis web site
bulletEarth Negotiations Bulletin's coverage of UNFCCC COP6-bis
 
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