The multi-million dollar trade in carbon flourishing in India faces the guillotine, with the European Union (EU) refusing to sign the Kyoto Protocol's second phase unless emerging countries commit to internationally binding targets by 2015 and begin discussions on a new deal at Durban in the end of this month.
The first phase of Kyoto Protocol expires next year, and a Durban debacle could leave international compact and carbon trade in suspension. For two consecutive years – in Copenhagen and Cancun – the developing world, including emerging economies such as India and China, gave in substantially on issues such as international scrutiny and international voluntary pledges, while the rich countries kept postponing a commitment to reduce emissions under the Kyoto Protocol. Now, Durban provides the last window of hope for the carbon trade to be kept alive.
The EU has again shifted the goalpost for Durban. This year, the EU demanded that the emerging economies agree to formal talks under a strict UN deadline on a new compact before it can make a political pledge to support Kyoto. The developed countries have indicated that they are happy to move the carbon trade under a new deal even as Kyoto falls through.
But, the BASIC nations – Brazil, South Africa, India and China – have in their last meeting made it clear that the Clean Development Mechanism, which governs the carbon trade, is an element of Kyoto that would only continue if the protocol exists.
The carbon trade allows the developed world to meet its Kyoto commitments at lower costs by paying the low cost of reduction in emissions in poorer countries and claim credit against their targets.
The developing world is not agreeable to let the only real tool maintaining a differential in responsibilities between rich and developing world on mitigating climate change fall through even as the rich nations continue to access the cheap route of reducing emissions, thanks to their poorer counterparts.
The talks leading up to Durban have failed to break the deadlock, with EU sticking to its guns and the US - a recession-hit economy going into Presidential polls next year - not keen to commit anything till it can prove back home that India, China and other emerging countries have been brought to 'symmetric' level of commitments.
This runs contrary to the existing UN Framework Convention on Climate Change, where the principle of differentiated responsibilities enshrines more commitments for rich countries that have a larger share of emissions. But the US has made it clear that it considers 'historical responsibility' and 'equity' as principles politically impossible for it to adhere to.
