DAVOS,Switzerland (AFX) - The US needs to lead the way in setting up a global carbon emissions trading regime, said chief executives of European and US power and industrial companies at the World Economic Forum.
Action by the US to set up a carbon trading system by 2010 would limit emissions and give firms the right to trade emission permits, they said, adding this would encourage China and India to do the same.
The CEOs, from firms including Duke Energy Corp of the US, Alcan Inc of Canada, and Vattenfall of Sweden, pledged to work with other industries and financial institutions to speed up the development of a global carbon trading regime.
Andrei Marcu, president and CEO of the International Emissions Trading Association, said countries had 'come from nowhere' and set up a global carbon trading market whose value doubled in the last year to 22 bln usd.
The development of the market needed to be accelerated to address global warming and a recognised price for carbon needs to be set, Marcu said.
Landfill and waste management were examples of industrial activities that had become more valuable as they are exploited to produce gas and energy, he said.
'There cannot be a global system without the US, but there is no turning back,' he said.
Chairman, president and chief executive of the US's Duke Energy Corporation, James E. Rogers, said it was critical that the US adopts an economy-wide, market-driven cap-and-trade approach.
Under such an approach, regulators would limit the emissions of polluters such as power plants to a level lower than their current emissions and those allowances would then be carved up into individual permits -- usually equal to one ton of pollution -- that can be bought or sold.
'At the end of the day, if the US acts, there is a high probability that the (US) government will have cap-and-trade by 2010 and that will help to bring in China and India so that we have a worldwide coming-together to address this problem,' Rogers said.
Lars G. Josefsson, the president and chief executive of Swedish power group Vattenfall, said putting a price on greenhouse gas emissions was best done by establishing a global emissions trading system.
'What is good about having a global price for emissions is that it will give market actors the correct signals to invest correctly,' he said.
'It will also give guidance to the research and development community on where to invest its efforts to most quickly cure the problem.
'When we say global, it does not have to cover 100 pct of the world, but it does have to be enough to be able to set a global price.'
The senior corporate and external affairs vice-president of Alcan Inc of Canada, Daniel Gagnier, said Alcan believed the world was moving towards the creation of a global regulatory framework for carbon pricing and trading.
'It should be intelligent regulation,' he added. philip.waller@thomson.com paw/nt COPYRIGHT Copyright AFX News Limited 2006. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited