As the various Kyoto institutions took shape in the last 12 months, many people started to look ahead to 2013 and speculate over the shape of the next emissions trading phase.
At a political level, 2007 was characterized by a steady increase in the volume and intensity of talk about climate change, as climate change believers beefed up their efforts to get skeptics and resisters on boardcapped by the Nobel committee's decision to award its 2007 Peace Prize to the UN Intergovernmental Panel on Climate Change and US activist Al Gore.
Perhaps the loudest noise of all came out of the US, where the new Democratic majority in Congress immediately served notice that it would work to set up a nationwide cap-and-trade scheme for GHG emissions.
That panel in February unveiled its Fourth Assessment Report which said that "warming of the climate system is now unequivocal," and was "very likely" due to human activity.
The term "very likely" used in the report corresponds to a statistical likelihood of 90%. The third report, published in 2001, had concluded that most of the warming over the previous 50 years was "likely"a 66% probabilitycaused by human activity.
The IPCC's findings unleashed a clamor for more action and greater cooperation, just as the UK's Stern Report, published four months earlier, had done. The European Union committed itself to a 20% cut in greenhouse gas emissions by 2020, and held out the promise of a 30% GHG cut if others joined. New Zealand and Australia both announced plans to launch domestic emissions trading. Since New Zealand is a Kyoto signatory, its trading program could eventually be linked to the European ETS.
Australia spent a good part of 2007 continuing to talk down emissions trading, before Prime Minister John Howard suddenly reversed direction and announced that the country would have its own trading scheme. But because Australia has not signed Kyoto, its market could languish in isolation unless its architects can find a way to build a bridge to other markets.
Perhaps the loudest noise of all came out of the US, where the new Democratic majority in Congress immediately served notice that it would work to set up a nationwide cap-and-trade scheme for GHG emissions. No fewer than seven bills have been proposed, with targets ranging from capping emissions at 2001 levels by 2015 to cuts of 60-80% from 1990 levels by 2050.
Congress' efforts were bolstered by an ever-expanding coalition of states and Canadian provinces in the west, headed by California which has agreed to establish its own cap-and-trade scheme.
In the east, the 10-jurisdiction Regional Greenhouse Gas Initiative nears its 2009 start with participants ironing out key details. While RGGI allowances won't be issued until the scheme's launch, the first forward sale of carbon offsets to a RGGI buyer was confirmed in mid-October at a price of $5.25/mt.
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