| WASHINGTON
- July 2 - World Wildlife Fund today welcomed the European Parliament's adoption of the world's first binding plan on trading emissions of carbon dioxide -- the primary heat-trapping gas responsible for global warming.
U.S. government agencies and businesses historically have been the primary proponents of using market mechanisms such as emissions trading in order to reduce the cost of emissions reductions.
The Parliament adopted a compromise agreement on an EU-wide greenhouse gas emissions trading system, achieved after hard negotiations with the Council of Environment Ministers. The trading system will be the centerpiece of EU climate policy and key to achieving the EU's Kyoto Protocol targets. It will put a cap on the total emissions from energy-intensive industry and the power sector, currently responsible for nearly half the CO2 produced within the EU.
"The Europeans have pulled ahead of the US on this issue, leaving US businesses standing at the station as the train leaves," said Katherine Silverthorne, director of World Wildlife Fund's U.S. Climate Change Program. "We expect to see European businesses jump ahead in development of climate solution technologies and international carbon markets-leaving looming questions of how much U.S. companies will ultimately suffer for our government's inaction."
The agreement today should allow the emissions trading system to start in 2005 as planned. Now, member states have to prepare their National Allocation Plans, a document setting out the targets that each sector and firm must meet. This needs to be approved by the European Commission by April 2004.
A crucial issue still to be decided is the extent to which participating firms will be allowed to use credits awarded to overseas projects that reduce heat-trapping emissions. The link to the Kyoto Protocol's Joint Implementation and Clean Development Mechanism is the subject of a second proposed directive, yet to be officially published by the European Commission.
"WWF welcomes the leadership that the European Union has shown by adopting this legislation," Silverthorne said. "This should silence those who implied that Europe's commitment to the Kyoto Protocol was no more than lip service."
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