Live

Watch CBSN Live

Market For Pollution Credits?

A $23 million project involving energy-efficient light bulbs in Mexico could lead to a global market for trading credits rewarded to countries or companies for curbing greenhouse gas emissions.

World Bank and other officials involved in the project said Thursday it was the first time an international treaty on climate change was used to verify emissions reductions. The accord will be reviewed in November in Bonn, Germany.

"The learning experience from this first pilot can be used to formalize the development of rules" for monitoring the reduction of greenhouse gases under the Kyoto Protocol, said Trygve Larsen, vice president of Det Norske Veritas, an international verification foundation based in Norway.

Industrial countries, including the United States, agreed in December, 1997, in Kyoto, Japan, to reduce emissions of heat-trapping greenhouse gases, notably carbon dioxide, sometime between 2008 and 2012. President Clinton has signed the protocol, but Congress has not ratified it.

To reduce costs, the agreement envisions a system in which countries obtain emission-reduction credits from other countries that already have met certain pollution levels. Critics argue it will be difficult to verify such emission reductions.

The approach officials discussed Thursday would involve private companies creating and transferring greenhouse emission-reduction credits. For example, a company could obtain a credit with a certain dollar value by building a power plant in a developing country. It could then sell that credit on the market or acquire credits.

To gain international acceptance that any emission reductions achieved are genuine requires certification by an independent, internationally recognized third party auditor.

"Many companies around the world are eager to get started with this," Larsen said at a news conference at the World Bank. The bank planned and supervised the Mexican project with Norway providing part of the funding.

Residents in the Mexican cities of Monterrey and Guadalajara replaced ordinary light bulbs with energy saving ones that are 75 percent more efficient and last 10 times longer. The objective was to require less electricity and thus reduce emissions of carbon dioxide from power plants.

Det Norske Veritas confirmed the lighting helped cut the equivalent of 171,168 tons of carbon dioxide from 1995 to 1998.

Under the climate treaty, only industrialized nations are obliged to reduce greenhouse gas emissions. But the treaty's provisions for creating and transferring greenhouse gas credits are designed to offer industrialized nations a more cost-effective means of achieving emissions reductions.

"The private sector typically views environmental responsibility as a cost," Larsen said. "However the ability to certify emissions reduction according to an internationally acceptable standard will give environmental projects a profit incentie."

View CBS News In
CBS News App Open
Chrome Safari Continue