Pope: Emissions trading can undermine climate efforts

Emissions trading schemes allow polluters to buy and emit carbon dioxide, blamed for global warming.

FILE: Pope Francis. Picture: AFP.

LONDON - Emissions trading is a quick-fix solution which could cause speculation and undermine global efforts to reduce greenhouse gas emissions, Pope Francis said in his encyclical on the environment on Thursday.

The pope made an urgent call for action to fight climate change in the document, which he wants to be part of the debate at a major United Nations (UN) summit on climate change in December in Paris.

"The strategy of buying and selling carbon credits can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide," the pope said.

"This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require," he added.

The pope has been talking to various people, including UN Secretary General Ban Ki-Moon, for over a year about the issue of climate change.

Emissions trading schemes allow polluters to buy and emit carbon dioxide, blamed for global warming. Under such schemes, companies or countries face a carbon limit. If they exceed that limit they can buy permits to emit from others in the scheme.

Ottmar Edenhofer, chief economist at the Potsdam Institute for Climate Impact Research and a consultant to the Vatican in the run-up to the encyclical, said the pope's comments should not be seen as an outright rejection of emissions trading.

"The pope is more or less asking scientists to check if this is an instrument which will provide a solution," he told Reuters.

Edenhofer speculated that the issue was included in response to concerns from Latin America. The pope, an Argentine, is the first pontiff from the Americas and the Southern Hemisphere.

A bloc of Latin American countries including Venezuela, Bolivia and Ecuador have been vocally opposed to the role of carbon markets in an international agreement on the grounds it may let rich countries off the hook from reducing emissions while failing to deliver climate justice to the poor.

The UN's Clean Development Mechanism (CDM), for example, allows carbon-cutting projects in developing nations to earn carbon credits that governments and companies in richer countries can use to offset emissions, making it cheaper to meet EU carbon limits.

"I assume it has been mentioned because many people in Latin America are quite suspicious about this market-based instrument," Edenhofer said.

In the encyclical the pope cites Bolivian bishops saying industrialized countries should have more responsibility for providing solutions to climate change.

The European Commission declined to comment but the International Emissions Trading Association said the pope's view on carbon trading was "out of step" with the views of most economists and analysts.

The European Union operates the biggest emissions trading scheme in the world and 40 nations and over 20 cities, states and regions now have a price on CO2 emissions.