The idea of trading in greenhouse gases – buying and selling of other countries emission of the gases responsible for climate change, is a key element of the Kyoto Protocol agreed in 1997, which says that trading is supplementary to domestic action. It was also discussed last year at the Buenos Aires climate conference (see previous article).
Trading in emissions has been shown to be an effective way of making reductions at least economic cost. However the Kyoto Protocol says trading must not be at the expense of sound domestic policies.
Meacher has endorsed the general concept of trading as it would allow business the flexibility to decide whether to supplement investment to reduce emissions by purchasing permits from other businesses.
Meacher says the Government is not treating this pilot study as an academic exercise, but working with the CBI, ACBE and others to develop a pilot system of domestic trading
“With business playing a leading role in these discussion, we can be sure the pilot study reflects business needs and priorities and at the same time provide important lessons on the design of any future domestic schemes,” he said. “It will also provide us with key information to help the UK to continue to play a key role in shaping the emerging international rules.”