Zurich (AFP) Nov 2, 2006
The Swiss banking group UBS on Thursday launched the first index of emissions allowances in global carbon trading markets. The UBS-WEMI index will initially cover European emissions trading schemes, with pricing in dollars, euros and Swiss francs, UBS said in a statement. Switzerland's largest bank said it would observe other emissions markets being set up and consider them for inclusion in the future.
"UBS believes that the global emissions markets have gained prominence over the last couple of years and are set to grow, both in volume and scope," the bank said. Emissions trading is an innovative offshoot of the Kyoto Protocol ratified by 165 countries to combat climate change.
The treaty set limits for emissions of six greenhouse gases emitted mainly by burning oil, gas and coal, including carbon dioxide, from 2008.
But it also advocated a "cap-and-trade" scheme allowing high emission industries or companies that want to exceed their cap to trade allowances or emissions permits with those that pollute less, effectively providing a financial price for carbon emissions.
The European Union set up one of the first markets for emissions, known as the European Emissions Trading Scheme (ETS), coverning carbon dioxide in 2005. It currently covers about 75 percent of the emissions market, according to the World Bank, and is due to expand to cover other gases in 2008.
The World Bank said in May that the global market for carbon dioxide emissions grew tenfold in the space of a year to reach 10.0 billion dollars in 2005. But it cautioned that the market was still deeply volatile.
A senior financial specialist at the Washington-based Bank, Karan Capoor, said that carbon had become a "financial commodity".
Some US states are setting up formal emissions markets, even though the US federal government has refused to ratify Kyoto, while informal markets are springing up elsewhere in the world.
The UBS-WEMI will be an open basket of future contracts on ETS carbon dioxide, weighted between the two main European trading platforms, the European Climate Exchange and the Nordic Power Exchange, UBS said.
A report for the British government released this week warned that unchecked climate change would cause huge economic damage worldwide, estimated at between five and 20 percent of global gross domestic product every year.
Carbon pricing was one of the key solutions advocated by the report.
earlier related report
"We are forecasting there will be a reduction of about 20 per cent in relation to agricultural production," Costello warned, after September trade figures showed a 1.0 percent drop in rural exports led a broader decline in the value of Australia's overseas shipments. However, he said it was too early to know if the full effects of the drought, which many analysts predict could turn out to be the worst on record, had flowed through.
"(The drought) will affect the export results and it will knock something off growth," Costello said.
"Unfortunately until such time as we get rain, the crops are going to be depressed."
The treasurer's warning followed his earlier forecast that the worsening drought would cut Australia's economic growth to below its long-term average of 3.0 percent.
Its impact would be on a par with the country's last drought in 2002, when agricultural production dropped 25 percent, leading to a 0.8 percentage point reduction in overall economic growth, he said.
earlier related report
The experts say that if everyone acts swiftly and together, at modest cost to themselves, the blaze can be safely doused at the outskirts of town.
Act too late, and the fire will damage or destroy homes, turn many poor inhabitants into refugees, leave some streets uninhabitable for centuries to come. No-one will be immune from its impact. Future generations will face an astronomical bill.
Your town's leaders respond by huddling together in a committee and after several years emerge with an eye-wateringly complex scheme which spells out who should do what. Can their emergency plan work? For one thing, it is full of novel, untested ideas. And the community's richest member -- and the individual who unwittingly did most to start the fire -- has walked out, complaining that the scheme is unfair and too costly for him.
That, roughly, is the state of play about climate change, whose urgency is underscored almost every week in dramatic new scientific reports.
Today, glaciers are melting, the Greenland ice sheet is shrivelling and the Siberian permafrost is retreating.
Without action, a few decades from now, there could be more frequent, vicious hurricanes, rising sea levels, droughts, floods and desertification, armies of "climate refugees" -- and, according to an official British report issued on October 30, the costs to the global economy would dwarf that of World War II.
To many outsiders, the efforts to tackle this looming nightmare seem pitifully slow and inadequate as politicians gather in Nairobi from November 6-17 for the next round of global warming talks.
But backers of the Kyoto Protocol -- the "emergency plan" of this thumbnail sketch -- are confident they are on the right track.
"By the middle of the century, emissions probably need to be reduced by 60 or 80 percent, at least by industrialised countries," said Yvo de Boer, executive secretary of Kyoto's parent treaty, the UN Framework Convention on Climate Change (UNFCCC).
"The encouraging thing is that some of the political signals in fact are going in that direction."
Reached after arduous negotiations, Kyoto took life in February 2005, committing industrialised countries -- minus the United States, the biggest single polluter, and Australia, which have refused to ratify it -- to a cut of about five percent in annual emissions by 2012 compared with their level in 1990.
De Boer, speaking on Monday ahead of the Nairobi talks, said the machinery was now in place for ratcheting up far deeper cuts in the post-2012 commitment round.
The multiplier effect will come from Kyoto's market in carbon emissions and "carbon credits," which can be offset against an industrialised country's pollution target if it transfers cleaner technology, he argued.
"If you look at the design process that has taken place, the international architecture that has been created, the flexibility mechanisms that have been developed and that are already creating a huge market, then you can say that the protocol is a giant leap for Man," said De Boer.
Compared with past UNFCCC talks which have been cliffhangers where sometimes Kyoto's very existence have hung in the balance, the Nairobi meeting should be a humdrum affair.
It will seek to fine-tune the Clean Development Mechanism (CDM), one of the treaty's two carbon-credits schemes, so that it gives more access to African countries, and set down a five-year programme for helping poor countries adapt to looming climate change through a fund financed from CDM proceeds.
Experts will deliver the latest scientific assessment on climate change and its likely costs, and corporations already involved in the carbon cleanup will be pitching their goods and services.
Many business chiefs are clamouring for pledges of continuity beyond 2012 to secure long-term investment.
But talks on the two key issues -- how deep the post-2012 cuts should be and whether big developing countries such as China and India should be required to make them -- have only just begun.
"A good goal might be to really kickstart" the process in 2007, said De Boer, as this would leave another couple of years for negotiations plus a couple of years for ratification.
By unspoken consensus, any attempt to tempt the United States back into Kyoto will have to wait until President George W. Bush leaves office in January 2008.
Any US re-entry would probably have to wait beyond 2012, under a deal that would satisfy critics in Washington who say the present Kyoto format is unfair.
But former vice president Al Gore, in Paris last month to promote his docu-movie on climate change, says Americans take global warming seriously and are far more supportive of Kyoto's binding caps than the monolithic No of the Bush presidency suggests.
More than 305 US towns and cities have independently embraced Kyoto and two regional emissions markets are expected, one of them in the huge economy which is California.
"We are seeing very encouraging signs that the change from the bottom will bring about a tipping point at the top," said Gore.
Source: Agence France-Presse
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UK To Push India And EU Over Climate Change Response
London (AFP) Nov 01, 2006
British Foreign Secretary Margaret Beckett said Wednesday she plans to press India on tackling climate change during a week-long visit to the country. Beckett, whose trip starts Thursday, will meet with her Indian counterpart Pranab Mukherjee and Prime Minister Manmohan Singh before flying to Mumbai and Bangalore.
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