International cap-and-trade markets expanding – but still contentious

Nascent carbon emissions-trading exchanges in several countries are increasingly looking at options to interlink with one another, which advocates say would offer investors long-term stability, increase revenues for the development of renewable energy and strengthen corporate support for climate policy.

Yet critics warn that so-called cap-and-trade systems are inefficient and create incentives for polluting industries to continue with business as usual. They also warn that the new systems in the United States are dependent on mechanisms that adversely impact on poor and indigenous communities in developing countries.

"I've been incredibly struck at the recent groundswell of interest by countries – including China and Korea – looking to develop carbon markets," Harinder Sidhu, an Australian civil servant, said Wednesday at a panel discussion here.

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