COPENHAGEN - Trade in controversial carbon rights under the Kyoto Protocol after 2012 could undermine emissions targets agreed under a new global climate pact, the European Union environment commissioner said on Tuesday.
Under the Kyoto treaty, which expires in 2012, nations that are comfortably below their greenhouse gas emissions targets can sell the difference in the form of rights called Assigned Amount Units (AAUs) to countries struggling to meet their own targets.
If we have this amount of AAUs (post-2012), no matter how ambitious we are in Copenhagen, it will be not be enough because of this hot air, European Union environment commissioner Stavros Dimas told reporters at a U.N. climate talks in the Danish capital.
Critics call AAUs hot air because most of them are the result of the collapse of eastern European industry rather than investment in clean energy. U.N. climate talks this week to find a replacement for Kyoto have shed little light on the future of AAUs.
Seven eastern European countries proposed that AAUs be bankable under a new agreement, while green groups pushed to abolish AAU banking and large-scale trade in the rights.
The political deal that will be forged in Copenhagen ... should keep the door open for allowing the full transfer of the surplus represented by the AAUs to the post-2012 framework, the group which includes Poland, Hungary, Romania and Bulgaria said.
Greenpeace warned against the idea, saying post-2012 trade in AAUs threatens the environmental integrity of a new pact.
The surplus of AAUs ... amounts to roughly one third of the emission cuts already pledged by developed countries, it said.
If carried over to after 2012, this surplus represents an extreme threat to the environmental integrity and effectiveness of the climate regime.
Greenpeace said a combination of two proposals could address the AAU surplus while maintaining a European Union target of limiting a global temperature rise to 2 degrees Celsius.
It suggested developed countries raise their 2020 emissions targets by 4-6 percent in aggregate to accommodate the surplus.
Additionally, it said post-2012 AAU trading should be limited, and only one quarter of developed nation emissions targets under a new deal should be able to be met using AAUs.
Russia and Ukraine alone have an AAU surplus of billions.
Russia said on Monday it will not sell significant amounts of AAUs if doing so would undermine global carbon prices, but will resist moves to cap such sales.
The group of seven east European nations said until a common EU position on AAU banking is defined, the bloc should remain neutral on the issue.
(Writing by Michael Szabo; Editing by Dominic Evans)