A proposal to have a global carbon trading mechanism or carbon tax and a “lean” negotiating draft by October saw India raising eyebrows at the St Petersberg Climate Dialogue that ended without meeting its objective of building a consensus on a draft for the Paris climate conference this winter.
Both German chancellor Angela Merkel and French president Francois Hollande spoke of carbon pricing -- based on the 'polluter pay' principle -- finding a place in the Paris agreement to encourage investments in cleaner technologies.
“Devise new instruments to get more funds to encourage investments. There is a question of carbon pricing. We can build a world market for carbon,” Hollande said.
The European Union (EU) in 2012 had suspended its proposed carbon tax on emissions from airlines crossing Europe after stiff resistance by India and China. The EU plans to revive the plan and embed it in the Paris climate deal on the grounds that the revenue generated from the mechanism would be provided for climate adaptation in the most vulnerable, least developed and island nations.
Hollande described it as a “financial resource to compliment” the $100-billion contribution assured by wealthy nations to the developing world by 2020, apparently aimed at isolating India and China but winning over poorer nations.
Indian environment minister Prakash Javadekar was quick to ask whether the suggested market mechanism, whose contours were not clear, was a “feasible” way out and how it would pan out in the near future.
Hollande replied that it would help maximise public finance to fight climate change. Later, his foreign minister Laurent Fabius invoked high pollution levels in the developing world (read India and China) to justify the proposal.
Javadekar sought a separate two-day session before the negotiating draft for the Paris climate summit is finalised. India wants clarity on the tricky issues surrounding the Paris conference such as the binding nature of the new agreement and what the differentiation among rich and developing countries would mean. India is against its domestic commitments becoming binding and open to review by the global community.
The dialogue had environment ministers from 35 countries, who discussed the nature of the new climate agreement for 13 hours over a day. But, they failed to narrow down their differences as countries stuck to their old stands. The only consensus was on trying to have a negotiating text ready for negotiations by October.