Combating CO2 Emissions and Global Warming with Carbon Trading

          Global warming is an environmental issue that affects the whole world. In order to deal with the situation to make this planet sustainable for the future generations there is a need to combat all the problems on a global level. The Framework Convention on Climate change adopted at the 1992 Earth summit set a goal to limit greenhouse gas emissions to 1990 levels by the year 2000. That goal was unfortunately not met; the treaty did not commit the signatory states to meet target levels of greenhouse emissions by a particular date because of U.S objections to such a commitment. Western Europe and Japan have been more willing to regulate greenhouse emissions than the United States.

       The 1997 Kyoto Protocol adopted a complex formula for reducing greenhouse emissions to 1990’s level in global north over about a decade. The Kyoto Protocol is an international treaty that expands on the 1992 United Nations Framework Convention on Climate Change (UNFCCC), which commit states to reduce greenhouse gas emissions based on the scientific consensus that global warming is occurring and is extremely likely to have caused  by Human made CO2 emissions. The Kyoto Protocol was adopted in Kyoto, Japan on 11 December 1997 and entered into force on 16 February 2005. There are currently 192 parties to the protocol (Canada withdrew from the protocol effective December 2012).

       The European Union has created markets to trade emission credits between 11,000 industrial facilities across Europe. However the economic slowdown in Europe led to a drastic price drop of carbon credits in 2011. Those prices stayed very low through 2014, leading some to question the future of the European emissions trading markets. At the same time other countries created similar emission trading schemes, including South Korea, China and Japan. All the carbon markets use the free market principles to make reduction in carbon emissions more efficient. For example a venture in Brazil earned carbon credits by burning methane gas from garbage dump to electricity. European investors bought the credits and could sell them to say a polluting factory in Eastern Europe where reducing carbon might be especially expensive.

        With the Kyoto agreement set to expire after 2012, 180 nations have spent years negotiating what to do next. The United States rejoined the talks. In late 2011, states at a meeting in Durban, South Africa agreed to extend the Kyoto framework to 2013-2017 at a meeting late in 2014 in Peru, participants agreed on the principle that all the states rich or poor should commit to limit green house gases. Meanwhile the United States and china agreed to reduce its emissions by over 25 % by 2025 while China agreed to continue its shift from coal plants towards alternative energy resources. In addition about half of the states of United States and a number of cities began taking big steps to limit green house emissions.

       The Paris climate talk of 2015 was a key meeting in global climate politics expectations were high from the meetings with all sides simultaneously hoping for a strong agreement yet an agreement that meets their approval such agreements are hard to achieve given the public goods nature of climate change. If the Paris meetings come to be viewed as a failure it’s likely that many states will follow the path of united states and china making smaller separate agreements in the absence of a larger global one.