UK\'s Blair woos banks for emissions trading scheme
LONDON - Ten major investment banks sat down to an \"environmental\" breakfast with Britain\'s Prime Minister Tony Blair at Downing Street this week to discuss a new European emissions trading scheme.
Senior executives from Morgan Stanley (MWD.N: Quote, Profile, Research) , French bank Societe Generale (SOGN.PA: Quote, Profile, Research) and Barclays Capital (BARC.L: Quote, Profile, Research) , were among those invited to discuss an emissions trading market for the City of London, a Downing Street spokeswoman confirmed on Friday.
One banker who attended said Blair wanted to discuss what the City of London could do to help with the climate change initiative.
\"There are a lot of emission rights which could be traded in the future when the new EU directive is put in place,\" he said.
Margaret Beckett, Minister for the Environment, Food and Rural Affairs, also attended the breakfast.
From 2005 European Union companies in the power, iron, steel glass, cement, ceramic, pulp and paper industries will have to have \"emission rights\" or \"carbon permits\" to cover their carbon dioxide emission each year. In Britain this will involve about 2,000 installations.
Under an emissions trading scheme, companies which cut emissions by more than they initially pledged, would be able to sell them on as \"credits\" to firms unable to meet required reductions.
Britain has been running a voluntary emissions trading scheme since April last year. But from January 1, 2005, a European emissions trading scheme will come into force for all 15 member states, plus the 10 accession states.
\"This should be an attractive market for financial institutions to be involved in and with our experience of the voluntary scheme, London is ideally placed to be a base,\" the Downing Street spokeswoman said.
The proposed UK scheme could mirror a similar exchange set up in Chicago.
The Chicago Climate Exchange gives companies credits for cutting carbon dioxide omissions.
Story by Alistair MacDonald and Jane Merriman
REUTERS NEWS SERVICE
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