Europe forges major agreement on Kyoto related Directive
Ireland achieved has achieved a notable success during the country's EU Presidency with the vote in the European Parliament on 20 April confirming agreement between the European Parliament and the Council of Ministers on the Directive linking the project based Kyoto mechanisms to the EU emissions trading scheme.
The directive allows credits from emissions reduction projects, primarily outside the EU, to be used to offset emissions within the EU under the emissions trading system starting in 2005. The credits arise from investment in clean technologies in these third countries, with mutual benefit on both sides, as the host country receives investment in clean and sustainable development.
"Climate change is a global problem and the EU is steadfast in progressing global solutions through the Kyoto Protocol", Minister Cullen stated. "This directive will now provide a cost-effective basis for greenhouse gas emissions reductions across the globe and the transfer of clean technologies to eveloping countries and countries in Eastern Europe and Russia," he added.
The Kyoto Protocol established market-based mechanisms, including Joint Implementation (JI) and the Clean Development Mechanism (CDM) to achieve cost-effective emissions reductions. The Minister added the outline of future stages: "The EU is putting emissions trading in place from 1 January 2005. This is three full years before the start of Kyoto targets, and the Community wants to 'learn by doing' in the operation of emissions trading markets before the start of trading from 2008 once the Kyoto Protocol enters into force."
Mr Cullen stressed that "the linking directive will incentivise actions to promote the operation of JI and the CDM, as the opportunities now created to link to a guaranteed EU emissions trading market will give the certainty businesses need to engage in project investment and access least-cost reduction opportunities. The recognition of CDM credits in the EU trading system from 2005 recognises international agreements that these investments should benefit from a 'prompt start' ", he said.
The Minister emphasised: "not only is this directive crucial for EU industry, it is also important for Accession Countries and the Russian Federation who will be able to act as a host country for JI projects, attracting inward investment in clean technologies and assisting modernisation of their economies".