Then, in February, the International Panel on Climate Change (IPCC) issued its draft report, which predicted that global warming would cause the world's temperature to rise by somewhere in the range of 1.1-6.4ºC by 2100.
Most European countries will not meet their Kyoto targets by cutting their own emissions; they will have to buy credits from emissions-reduction schemes in developing countries. A carbon-trading scheme, which was supposed to be a pioneering showcase, has so far foundered. Member states issued too many permits, and the price of carbon plummeted. The price signal may have undercut efforts in developing countries to put in abatement measures in order to sell carbon permits to rich nations. And because the scheme runs only up to 2012, businesses have had no idea what the price of carbon will be--or even whether there will be one at all—and therefore no incentive to innovate or invest to cut carbon-dioxide emissions.
Higher costs for European companies will have two effects. They will increase conflict between the Commission, which sees combating climate change as its main aim at the moment, and member states. And it will raise calls for protectionism. That's happening already. Jacques Chirac, France's president, is demanding "border-tax adjustments" (ie, tariffs) to be charged on goods from countries that do not constrain carbon. The more ambitious the European targets for cutting carbon, the higher the cost will be, and the louder those calls will become.
Most European countries will not meet their Kyoto targets by cutting their own emissions; they will have to buy credits from emissions-reduction schemes in developing countries. A carbon-trading scheme, which was supposed to be a pioneering showcase, has so far foundered. Member states issued too many permits, and the price of carbon plummeted. The price signal may have undercut efforts in developing countries to put in abatement measures in order to sell carbon permits to rich nations. And because the scheme runs only up to 2012, businesses have had no idea what the price of carbon will be--or even whether there will be one at all—and therefore no incentive to innovate or invest to cut carbon-dioxide emissions.
Higher costs for European companies will have two effects. They will increase conflict between the Commission, which sees combating climate change as its main aim at the moment, and member states. And it will raise calls for protectionism. That's happening already. Jacques Chirac, France's president, is demanding "border-tax adjustments" (ie, tariffs) to be charged on goods from countries that do not constrain carbon. The more ambitious the European targets for cutting carbon, the higher the cost will be, and the louder those calls will become.
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