Satu Hassi, the former environment minister of Finland and now a member of the European parliament, speaks to Ritu Gupta on the business of CDM
How has climate change affected Finland?
The weather has become quite unpredictable. We are experiencing warmer summers. Winters tend to start late and the spring temperatures has gone up by 2 c. Certain diseases spread by insects have also become more common. Earlier, the population of these insects was controlled by colder winters, which is no longer the case.
How equipped is Finland to meet the Kyoto Protocol targets?
It's not clear whether we can meet our targets through domestic means. We are not trying to make use of the financial mechanism of Kyoto Protocol such as the clean development mechanism (cdm) or the joint implementation programme. Unfortunately, a new nuclear reactor has been pushed through on the pretext of meeting the Kyoto targets. Besides, influential people in the energy ministry of the Finland government support nuclear energy. There is a notion that public opinion tilts towards nuclear energy but when specifically asked, people have always voted for renewable energy.
The nuclear plant will further slow down Finland's plan to push for renewable energy. The ministry has even announced that they would not even try to meet the wind power target.
But cdm is not leading to sustainable development in developing countries?
I do not see cdm market as a catastrophe. It is, in its own way, establishing grounds for renewable energy in developing countries. It has just been a year that cdm is operational and it would be too early to judge its performance now. To solve problems for the next phase, however, we need to be more clear. We cannot put the responsibility on buyers to ensure that the cdm market leads to sustainable development. The role of local ngos is very important. They should protest against erroneous cdm projects.
Will the world leaders be able to negotiate post 2012, the second Kyoto commitment period?
There are many people who do not want to conform to the Kyoto. But there are others who are serious about it. Many companies are realising that carbon market is the new way of doing business. Therefore, with a business perspective the treaty may survive.
Steps to combat climate change are turning into big business, which is clear because a carbon expo held recently attracted larger crowds than the 24th session of subsidiary bodies to the un on climate change. If we don't have a second commitment period it's going to be unfortunate.
Furthermore, scientific knowledge says that we need to cut down our emissions by half to combat climate change. But it is not possible to do that unless India and China decide on emissions targets. It is a tough task for international diplomacy to develop a model that can be followed by all post 2012. At the moment they aren't any proposals from any major players. But the fact is that developing countries need to understand that they have to limit their emissions at some point of time.
Is it true the markets saw a crash in carbon price recently because the governments had injudiciously allocated rights to emit to industry?
The companies emitted less than what was allocated to them by the governments last year. They had to, for the first time, take pollution as a cost factor and this changed their behaviour. But the governments had also over-allocated, which is also the case with Finland. This is a learning process. For some months though the price of carbon was as high as 30 euros and experts had warned that prices might crash. After all, there are cheaper ways of meeting the Kyoto Protocol targets.
To me, the biggest problem with the carbon trading system is that there is no legal certainty after 2012. Many investments are not happening right now since there is no certainty of carbon having a price after 2012.
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