Countries are putting their cards on the table

The current political and environmental 'climate' is being very conducive towards getting planet-saving policies written into law.

This week the EU is set to draw hard and fast lines on carbon limits in phase two of it's ETS (European Trading Scheme). Activities in the EU scheme are being watched closely worldwide - as it's the largest and most ambitious to date, and other carbon trading systems will likely either pattern themselves after it, or be an extension of it.

By creating a market for carbon, firms are meant to have a financial motive to cut emissions.

Heavy polluters, notably power firms, are obliged to own the right for each metric ton of carbon dioxide they produce.

Depending on their needs, they can buy or sell permits.

But critics have argued that the limits have been set too high, thereby failing to encourage firms to make the necessary cuts.

In their defence, proponents have said the scheme - which only started last year - is in its infancy and needs time to adapt.

New Zealand's opposition leader, John Key, is pushing the Labour government to begin carbon trading negotiations with Australia. Prime Minister Helen Clark has already expressed her desire to see New Zealand being the first truly sustainable nation, and there is a lot of grass-roots sustainability action happening through the country.

China is beginning to embrace carbon-trading, as it now realises it can attract a great deal of overseas investment in it's own eco-development. Over the last few years it's gone from taking a 5% percent piece of the CDM pie (the Clean Development Mechanism set up through Kyoto) to today's 60% percent. In a nutshell, this means that more than half of overseas carbon trading under the Kyoto Protocol is going into making China cleaner and greener - and with it's burgeoning population and industrial growth, now has got to be the right time to be passing green technology insights and investment to this nation, for the good of us all.

Initially skeptical of the carbon-trading market, worrying that it would allow richer nations to pay their way out of obligations to reduce emissions under the 1997 Kyoto Protocol on climate change, China has come to embrace the system as an opportunity to attract foreign investment in promoting energy efficiency and renewable-energy projects....

Beijing has approved 125 projects so far under the CDM, including wind farms and hydropower generation, as well as chemical-pollutants reduction projects. These are expected to cut 630 million tons of carbon dioxide, the main gas contributing to global warming, by 2012, when the first phase of the protocol expires....

Especially since China is now taking the biggest chunk of CDM finances, ensuring investment is pumped into worthy projects will be critical to maintain credibility in the system.

Despite the newfound enthusiasm for the CDM among Chinese officials, its future in China remains questionable, not least because of Beijing's own development plans. Hit by acute power shortages in the past few years, the country has embarked on a frenzied campaign to build more power plants. Japan's Institute for Energy Economics predicts that by 2007, China will have built an additional 200,000 megawatts of new power-generating capacity, about 80% of which will be coal-fired.

This greater capacity is expected to contribute some 1.17 billion tons of new carbon-dioxide emissions by 2010. This whopping amount would eat up a good portion of the targeted overall emission reductions under the Kyoto Protocol of 5.5 billion tons of carbon dioxide over the same period. - Asia Times Online

With large developing economies like China, India and Brazil, there is an element of urgency to 'head them off at the pass', as it were, as decisions on large-scale enviro-damaging projects are essentially irreversible and on this scale will have a profound effect on efforts to restrict global warming.

The good news is that clean-technology industries that have been running on an R&D shoestring for years are getting contracts and investment that will enable more creativity and competitiveness in that market. Expect to see solar, wind, hydro, and other technologies advance at an accelerated rate.

As the U.S. is still opting out of the Kyoto agreement, most of this funding is coming via European markets, although with the recent mid-term power shift in U.S. politics and independent state initiatives, we may see a lot more investment in the kitty yet.

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