EU Ministers Give Green Light To Carbon Market Scheme

By Agence France-Presse European Union environment ministers gave the go-ahead Dec. 9 to a scheme requiring major industries to join a market in carbon dioxide (CO2), the main greenhouse gas blamed for global warming. The 15 ministers unanimously approved proposals under which producers in six sectors -- electricity and heating; steel; cement, glass; brickmaking; paper and cardboard -- will trade in emissions quotas from the start of 2005. It is the first detailed inter-country agreement for corporate trading in CO2. The scheme aims at providing a market impetus to the goal of cutting greenhouse-gas pollution under the UN's Kyoto Protocol, which was concluded last year after four years of bitter squabbles. Under it, EU companies whose emissions are above a specific level would be able to buy that excess from other companies whose pollution is below the threshold. The alternative is to pay a stiff penalty for every excess ton above that limit. This in theory should provide a strong financial incentive, among buyers and sellers, to make plants as clean as possible. The compromise agreed by the ministers, which has to be approved by the European Parliament in order to become law, does not spell out the required pollution level. During the 2005-2007 period, member states can ask the EU's executive, the European Commission, to exempt a company from taking part in the market if they can prove that a national regulatory approach, rather than a market one, would achieve the same pollution cuts. But from 2008 onward, participation "will become mandatory." Copyright Agence France-Presse, 2002