Verdantix Says Weak Copenhagen Accord Turns Spotlight On US Cap-And Trade Bill
London, UK. December 22, 2009. The Copenhagen Accord increases the probability of a US Senate agreement in 2010 on climate change legislation, according to independent analyst firm, Verdantix. The three-page, political statement “noted” by environment ministers at Copenhagen reflects the objections of US Senators to the Kerry-Boxer Bill. The Copenhagen statement contains no deadline for the signature of an international treaty and no post-2012 greenhouse gas (GHG) reduction targets. Developing countries like Brazil, China and India agreed to report voluntarily their GHG inventories every 2 years with a moderate level of international verification.
“This paper-thin deal will help convince hesitant US Senators to back the Kerry-Boxer Clean Energy Jobs And American Power Act” said Verdantix Director, David Metcalfe. “The US has skillfully manoeuvred China to take a baby-step into the global climate change regime. The Chinese government will now be expected to produce a bi-annual GHG emissions report on a voluntary basis. Dodging this voluntary commitment will be hard for the world’s largest emitter of carbon dioxide emissions and biggest recipient of subsidies and clean technology under the Kyoto mechanisms. With China roped into GHG emissions reporting and no UN treaty in sight, US Senators have lost crucial arguments to block US cap-and-trade legislation.”
For over a decade the US Congress has opposed the Kyoto Protocol. This makes the UN’s COP-15 negotiations a success for the Senate because ministers failed to agree on reforms to the Kyoto Protocol’s carbon trading mechanisms and did not set legally-binding targets for a second commitment period starting January 1, 2013. Verdantix analysis in its report, Business Implications Of The Copenhagen Accord, finds that the UN Clean Development Mechanism (CDM) will not survive in its current form. A successor treaty to Kyoto is unlikely to be ratified by the end of December 2012 so smart investors will shy away from CDM projects – which are already high risk. In 2013, US carbon trading may rise like a phoenix from the ashes of the UN’s carbon offset market.
“We estimate that a US carbon trading market would be three times the size of the European carbon market” continued Metcalfe. “The environmental and business benefits of a fully-functioning US carbon market with a 2020 emissions reduction target of 14% to 17% against a 2005 baseline far outweigh the potential benefits of extending the life of the Kyoto carbon market. A US carbon market based on an economy-wide emissions cap would also avoid the dysfunctional market rules and weak infrastructure associated with the Kyoto CDM market. Copenhagen’s failure could pave the way for Washington’s success.”
About Verdantix
Verdantix is an independent analyst research firm. We help senior executives and change leaders with our unique strategic and commercial analysis of climate change, sustainability and energy issues. Our clients are managers, advisers and entrepreneurs in blue-chip corporates, services firms, new ventures and government agencies. Visit www.verdantix.com
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Kate de Lima, Media Relations Manager
press@verdantix.com
Tuesday, 22 December 2009