The price of traded carbon-dioxide emission allowances in Europe—permits to pollute, if you like—has increased fourfold since January, touching €29.35 ($34.90) on Monday July 4th, a record.But challenges remain ahead, including the rising price of oil (which mean more coal-burning in Europe, which may overly-inflate emissions credits), the US's refusal to play along, and China and India's exemption from Kyoto obligations. The essays final column seems almost prophetic now that the G8 summit is over:
The amounts involved are small—less than 1m tonnes a day, on the exchanges—compared with the 2.2 billion tonnes a year in European permits issued. But they have grown surprisingly quickly since Europe launched its emissions-trading system for carbon dioxide—the biggest of the Kyoto treaty’s six greenhouse gases—in January.
What can possibly come out of Gleneagles on climate change? Not much, in all honesty: especially after the high-testosterone charge of Live8, most attention will probably be given to the easier issue of aid for Africa. What could be agreed, however, is an unglamorous but necessary commitment to work for a common set of fundamentals—an assertion, as Andrei Marcu, president of the International Emissions Trading Association in Geneva, puts it, “of the political will to make countries around the world develop basic building blocks in parallel so that in future there is enough commonality to converge.” Easier said than done.
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