Speaking before the energy and climate change select committee Rudd said that the European Union would need to be as “flexible as possible” to create links between its Emissions Trading System (ETS) and emerging trading schemes in the rest of the world.
“Sometimes it will feel like we’re trying to link apples with pears but we’ve got to try to be ambitious and try to find a common unit,” Rudd said.
“It will be difficult to achieve,” Rudd added, “and we will need to consider very carefully the legal positioning and accountability of different types of credits”.
Rudd said that one of the ways the EU should avoid the pitfalls of linking different emissions trading systems is by holding up the ETS as a common example “of a system that works and can be reformed”.
Central to the drive to create a global emissions trading system will be the creation of a national scheme in China – the world’s largest carbon emitter – but Shell Research’s chief climate change adviser David Hone warned that this is still “a long way off”.
Hone told the same committee meeting that a national carbon trading scheme in China will take at least 2-3 years to implement, meaning the system may only be established by 2020.
After this the growth of the system is likely to be in neighbouring Asian regions before global linking becomes a possibility.
“There’s a way to go yet,” Hone added.