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World ‘needs’ global carbon market

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Carbon emissions trading schemes should be conducted on a worldwide basis, the CBI has said.

Governments and business groups are meeting at the UN’s Climate Change Conference in Copenhagen for the next two weeks.

The aim is to secure an agreement that would see global carbon emissions cut for the whole planet by 2050 and for individual countries by 2020.

The CBI wants a programme like the EU’s Emissions Trading Scheme, that allows firms to buy carbon trading permits, to be extended on a global scale.

John Cridland, the CBI’s deputy director general, said: “UK firms have a strong interest in a successful outcome at Copenhagen. After all, it will be business that delivers the new infrastructure and develops the products and services needed for the shift to a low-carbon economy.

“The last thing we want is a disorderly transition with countries making their own arrangements and moving at different paces.”

Specifically, the CBI argued for Copenhagen to lay the foundations for a global market for carbon, one that caps emissions and creates a market for trading in carbon permits.

Mr Cridland continued: “We believe the EU Emissions Trading Scheme is one of the best mechanisms for guaranteeing year-on-year cuts to emissions in a cost-effective way. By forcing polluters to pay more for a decreasing number of permits, that in turn encourages investment in green technology and energy efficiency.”

The CBI also wants broad agreement about how the wealthier nations will share the bill for helping the developing world make the move to a low-carbon economy.

Mr Cridland concluded: “With the right deal at Copenhagen, there could be huge opportunities for the UK. Sectors where we could build a real advantage and create jobs include offshore wind, low-carbon vehicles, carbon finance and clean coal.

“But there needs to be a level playing field, or UK companies could find themselves at a serious disadvantage as manufacturers of commodities such as steel or cement shift production to countries where emissions targets aren’t as tough.”

The Copenhagen conference is being hailed as one of the most critically important meetings the world has staged in 50 years.

Should a binding agreement be reached, some commentators believe that it will herald the race to a low carbon economy, one that will present UK firms with an opportunity to create new products and to tap new markets.