06-11-00 The US and much of Latin America have struck a landmark deal to push for full-scale trading in greenhouse gas emissions as a solution to global warming. The alliance between the developed and developing world is the first of its kind and will put pressure on the European Union, which opposes emissions trading, at this month's climate change conference in The Hague.
Fourteen Latin American countries will back the US bid to allow it to count the reduction of emissions in poorer countries and the use of carbon "sinks" -- the planting or saving of forests -- as part of its own quota under the 1997 Kyoto protocol. The proposal foresees the private sector preserving or planting forests in the developing world and building cleaner factories there to comply with emission reduction targets.
"The principle is that there will be an economic transfer from north to south," said Roberto Rojas, foreign minister of Costa Rica, which brokered the deal. "The rainforest cannot be protected without money. It will be a payment for the environmental service the less developed world provides."
A US official close to the negotiations said: "It is a win-win situation as it is good for the environment and good for development. This would be a legal mechanism that will give companies an incentive to do projects in the south. We hope the sums involved would be substantial." Costa Rica, which has a long history of conservation, has already earned more than $ 3 mm from carbon trading but the market cannot begin properly until the rules are agreed.

The Kyoto protocol, which has yet to be ratified by any country, permits developed countries under the clean development mechanism to finance projects in developing countries but does not make it clear if these count as reductions. The rich countries must make average cuts of 5.2 % in 1990 emission levels between 2008-12. Europe opposes the use of carbon sinks measuring the amount of greenhouse gas absorbed by plants on the grounds that they are not permanent, can burn andtherefore release carbon and take away the need to reduce pollution.
It prefers the use of alternative energy sources such as wind power, where it is ahead of the US. Brazil, which is a large emitter because of its clearing of the Amazon, subscribes to this view and has not agreed to the US deal.
The US, however, can count on the support of Australia, Canada, Japan, Ukraine and Russia, which together have enough weight to block any deal at the summit. Franz Tattenbach, Costa Rica's climate change ambassador, is working on a compromise to allay EU concerns by forcing companies to only count one of every two forestry projects.