Searching for flexibility creating a market

If you were sitting in Oslo, Norway, in 1991, as was Ted Hanisch, as the UN climate negotiations started, then two things would have been obvious to you. On the one hand, Norway has a strong tradition of environmental leadership. In the form of previous (and future) prime minister Gro Harlem Brundtland, it provided the chair of the World Commission on Environment and Development that popularised the term 'sustainable development'. The country also has considerable achievements in reductions in various pollutants and a positive reputation for stringent environmental regulation. On the other hand, Norway is an oil producer and exporter, already heavily dependent on oil exports for growth and export earnings, and poised for a significant expansion of its oil operations. Public pressure and diplomatic reputation required Norway to play a positive role in the response to climate change. But emissions were projected to grow significantly because of the role of oil in the economy.

Hanisch was director-general at the Center for International Climate and Environmental Research (CICERO), a newly formed think-tank in Oslo. His response to this dilemma was to propose, in a paper produced in 1991, that countries ought to be able to meet their obligations to reduce their emissions jointly. This could take various forms -investment by one country in projects in another to offset their own emissions, joint projects to limit the emissions of both and so on. But the key was to provide flexibility to allow for the special situations that particular countries found themselves in.

This idea became included in the UN Framework Convention on Climate Change agreed in 1992. US negotiators in particular jumped on the idea, arguing that countries should have maximum flexibility - to

JI: putting flexibility into practice

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