Isra-Mart srl:Cancun summit divided over carbon market reforms

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Proposals to reform the global carbon market dominated the third day of the international climate change negotiations in Cancun yesterday as countries clashed over plans to extend the UN-backed Clean Development Mechanism (CDM) offsetting scheme.

The talks once again ended in deadlock as Saudi Arabia and other oil-producing states stepped up calls for carbon capture and storage (CCS) projects to be granted the right to issue carbon credits under the CDM – a proposal fiercely opposed by Brazil and a number of countries.

The negotiations prompted calls from carbon traders for diplomats to urgently reach an agreement on the future of the scheme or risk fuelling fears the CDM will fold in 2012.

"There is no question that the countries negotiating in Cancun overwhelmingly want the CDM to continue; they should find a way to make their intention clear," said Henry Derwent, president and chief executive of the International Emissions Trading Association, in a statement.

"It is in no one's interest to let the future of the most successful mechanism under the Kyoto Protocol become a bargaining chip in these negotiations. And it would be tragic if mixed signals about how the CDM could be used across the world in the future deter desperately needed investment in developing countries."

Meanwhile, Japan yesterday resisted calls for it to drop opposition to an extension of the Kyoto Protocol, insisting that while it would continue to honour its obligations under the treaty up to 2012, it would not support a second commitment period.

"It does not make sense to set a second commitment period," Hideki Minamikawa, vice minister for global environment in the Japanese environment ministry, told reporters. "[Signatories] to Kyoto only represent 15 per cent of global emissions, but the countries who have signed up to the Copenhagen accord cause 80 per cent of emissions. We want a single binding treaty... We should jump ship to a more effective framework."

The fallout from the decision, which was reportedly made at a meeting chaired by prime minister Naoto Kan, continued yesterday with diplomats voicing fears that Russia, Canada, Australia and New Zealand could join Japan in publicly opposing an extension to Kyoto.

Meanwhile, negotiations to finalise a new international mechanism for protecting forests received a boost when IT giant Google debuted a satellite-based technology designed to help projects identify where illegal logging is taking place.

The system, dubbed Google Earth Engine, uses real-time images from US and French satellites and processes them in the company's datacentres, allowing scientists and officials working on forest protection projects to gain an image of a remote area within minutes of it being taken.

The company said it hopes the technology will provide a boost to plans for the so-called Reduced Emissions from Deforestation and Degradation (REDD) mechanism which is being negotiated in Cancun by allowing governments and investors to check forest protection schemes are working.