Copenhagen Climate Deal Depends On U.S.: Analyst
Author: Nina Chestney
London - The emergence of a global deal to cut greenhouse gas emissions in Copenhagen in December hinges on the United States passing its own climate bill before then, analysts at Point Carbon said on Wednesday. "The probability that an international agreement with quantative targets will be signed in Copenhagen in December is at least 50 percent," the research group said in a report.
That possibility would increase significantly if the U.S. Senate passes its own bill before December aimed at launching an emissions trading scheme.
Carbon market experts and environmentalists are concerned that the legislation will not pass the Senate until next year.
"If a deal is signed we expect the targets to be 15 percent below 1990 levels by 2020, with the EU pledging to cut its emissions by 30 percent and the U.S. by 7 percent below their 1990 levels," Point Carbon said.
If the Senate does not pass the bill, the research group predicts a watering down of emission cuts targets.
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The Copenhagen deal is significant as more than 190 nations will attempt to agree on emissions cuts targets to 2020, creating a successor to the Kyoto Protocol which expires in 2012.
Developing countries led by China and India want rich countries to cut greenhouse gas emissions by 25-40 percent by 2020 compared with 1990 levels. By contrast, U.S. President Barack Obama wants to cut U.S. emissions back to 1990 levels by 2020, a cut of 14 percent from 2007 levels.
G8 economies' failure on Wednesday to set a target for halving global emissions by 2050 at a summit in Italy is being seen as a further setback to any Copenhagen deal.
But prices for carbon permits under the EU Emissions Trading Scheme (EU ETS) should rise to 40 euros ($55.68) a metric ton if a global climate deal is reached, Point Carbon predicts. The permits called EU Allowances currently trade around 13 euros a metric ton but are expected to rise to 20-35 euros by 2012.
Meanwhile, the U.N.'s Clean Development Mechanism (CDM) will continue to be the dominant credit generating scheme after 2012, Point Carbon said.
This goes against the EU's wish to re-write the rules of the $6 billion scheme that pays developing nations to cut greenhouse gas emissions.
The EU wants an agreement at Copenhagen to include plans for entire industrial sectors in advanced developing countries to meet efficiency or emissions standards before earning offset credits.
"It is unlikely that the current climate negotiations will see the introduction of new mechanisms for crediting sector and forestry activities," Point Carbon said.
(Editing by Keiron Henderson)