South Africa Says U.S. Should Adopt Carbon Budget by 2020

South Africa Says U.S. Should Adopt Carbon Budget by 2020

The U.S. should provide more detail about its probable emissions and consider adopting a U.K.-like carbon budget to take advantage of global emissions markets by 2020, according to a South African climate negotiator.

The U.S. should prepare to “take on a budget,” which is an emissions limit for a set period of years, starting in 2020, Alf Wills, the African nation’s chief negotiator, said Dec. 8 in an interview in Doha, Qatar. In the meantime, many richer nations need to start making commitments comparable to the Kyoto Protocol, which sets targets for 37 countries, he said.

In return, developing nations may then grant the U.S. and other nations outside Kyoto easier access to the protocol’s tradable credits, which include Assigned Amount Units, Certified Emission Reductions and Emission Reduction Units, he said. CERs for this month today fell to a record 56 euro cents ($0.73) a metric ton on the ICE Futures Europe exchange in London. The U.K. has installed a program of carbon budgets through 2050.

Todd Stern, Barack Obama’s senior climate envoy at the United Nations talks in Doha, which ended Dec. 8, declined to say how a post-2020 global climate-protection deal might look.

“The challenge of governments using policy well and using financial instruments well to leverage private capital is a huge one and one of the most important ones going forward in the next few years,” Stern said Dec. 8 in an interview in Doha as the talks were wrapping up. “We and many other countries are working on that. But in terms of what the post-2020 regime is going to look like, it’s way too early to tell.”

‘Price Crashes’

Carbon markets don’t work well at the moment because most nations including the U.S. are sitting outside them, Wills said. They need to be drawn in over the next eight years as the world negotiates carbon budgets or a Kyoto-like replacement, he said.

“The problem that you have is that when you start generating supply of credits and you don’t match that with a cognizant increase in demand through a carbon-budget approach, then the price crashes, which we have witnessed,” Wills said.

Emission Reduction Units created by nations currently taking part in the Kyoto Protocol, including Russia, Ukraine and the European Union, dropped yesterday to a record 30 euro cents a metric ton on ICE Futures.

“You’ve got 10 gigatons of hot air in the system. You’ve got 20 percent of the world emissions, which is the U.S., not participating in that system,” he said. “The answers are simple in theoretical terms. Political terms, not so simple.”