Regulation of carbon trading to go to new independant body

Regulation of the carbon market should be taken out of the hands of UN bureaucrats and transferred to a new independent body drawn from central banks and stock exchanges, according to an influential group of legislators. The proposal was among several affecting the carbon market floated at a meeting in Brasilia of the Globe (Global Legislators’ Organisation for a Balanced Environment) G8+5 Legislators’ Forum – more than a hundred parliamentarians from the G8 countries plus Brazil, China, India, Mexico and South Africa. Another policy document suggested raising much greater sums to help developing countries adapt to climate change, by extending the existing levy on the CDM to other trading systems including the EU ETS, and possibly also to international aviation. The proposal for reform in the regulation of the carbon market came from a working group dealing with market mechanisms. In its submission to the forum, the group argued that both the CDM and the EU ETS were too prescriptive as to the number and type of projects that qualify for credits, and that they had produced market failure through inappropriate regulation, particularly with respect to projects in the developing world. It argued that the secretariat of the UNFCCC should no longer be responsible for both the deliberative functions of the UN climate treaty and the day-to-day work of project approval and regulation of the CDM. Working group Chairman and former UK Trade and Industry Secretary Stephen Byers said that if the carbon market was to grow effectively, there was a need for a new international framework to enable carbon to be traded like any other commodity. “There would remain a role for the United Nations, which will be to lay down the policy objectives, but then there would be a separate body, perhaps made up of central bankers and stock exchanges worldwide, who would actually be responsible for implementation,” said Byers. “The UN is probably not the best organisation to do that detailed implementation work – we think that would be far better done by people who have experience of markets,” he added.