A global carbon trading network will be vital to prevent dangerous climate change, concludes Lazarowicz report commissioned by the Prime Minister Gordon Brown and released July 20. 

Carbon markets will help the ability of countries to avoid dangerous climate change, and will also reduce the cost of combating climate change.

Prime Minister Gordon Brown welcomed the report by saying 'Mark Lazarowicz's report which shows that with the right reforms and participation, global carbon trading – alongside strong domestic effort - can help the world meet the tough emissions reduction targets as demanded by the science'.

Read the video transcript

Providing vital funds ahead of Copenhagen

Carbon trading and the carbon markets can help domestic and international cuts in carbon as well as provide valuable finance for an international deal. The PM launched a ground-breaking climate finance package in June 2009 – proposing $100 billion finance breakthrough – as part of the UK’s Road to Copenhagen manifesto. Placing a figure on the table ahead of Copenhagen negotiations is aimed at breaking the deadlock of how climate emissions reductions will be paid for, and by whom.

Carbon markets themselves will not alone tackle climate change and strong domestic action in the UK is also needed. The UK Government is committed to meeting its required 34% cut in emissions by 2020  and the UK’s Low Carbon Transition Plan, published on 15 July, sets out the domestic actions the UK requires to meet our carbon budgets.

Key findings

The report concludes that:

• Cap and trade systems can provide ambitious cuts in greenhouse gas emissions by putting a price on carbon and ensuring that the polluter pays
• Global carbon trading could reduce the costs of cutting emissions by up to 70%. Potentially, this could allow the world to cut global emissions by an additional 40-50% at the same cost compared to domestic action alone. This would give a greater chance preventing global temperatures increases above 2 degrees centigrade – the widely agreed threshold for dangerous climate change, and a threshold acknowledged by the recent G8 and MEFs
• Carbon trading will also provide substantial financial flows to the developing world to support their transition to a low carbon economy - key concerns for a Copenhagen deal  

Trading in emissions started in the United States in 1990. The US trading system for sulphur dioxide reduced emissions by 43% between 1990 and 2007, three years ahead of schedule and at a quarter of the predicted cost. And the EU Emissions Trading System, which is now in its second phase has already started impacting on company decisions to reduce emissions.

Access the report.