This is an excerpt from EERE Network News, a weekly electronic newsletter.

June 19, 2002

NAFTA Commission Calls for Carbon Trading, Renewable Energy, and Energy Efficiency

The countries of North America should develop a carbon emissions trading system and promote renewable energy and energy efficiency, according to a report issued on June 17th by the Commission for Environmental Cooperation (CEC). The CEC was established by Canada, Mexico and the United States to build cooperation among the partners in implementing the environmental accords included in the North American Free Trade Agreement (NAFTA). The new report, "Environmental Challenges and Opportunities of the Evolving North American Electricity Market," was prepared for the CEC by an expert advisory board.

The board specifically recommends forming a North American fund to promote the adoption of best available emission control technologies, energy efficiency measures, and energy conservation within the NAFTA countries. It also urges the NAFTA countries to promote the development and use of renewable energy through increased market-based incentives and funding. And in addition to a carbon emissions trading system, the board recommends continent-wide trading systems for emissions of sulfur dioxide and nitrogen dioxides. See the CEC press release. For the full report, as well as nine background papers (including one on renewable energy) and comments from the three governments, see the CEC Web site.

The United States is committed to expanding energy trading with its North American neighbors and to strengthening North American energy markets. The North American Energy Working Group, formed to help meet these commitments, issued its first report on June 10th. "North America - The Energy Picture" presents an overview of the energy situation on the continent. See the DOE press release.

A North American trading system for carbon emissions would represent a significant step toward addressing climate change issues and (as noted in the CEC report) would promote energy efficiency and renewable energy. Although President Bush has rejected the Kyoto Protocol, which would have mandated some form of carbon emissions trading, the United States is taking action at the federal and state levels to address climate change. According to the Pew Center on Global Climate Change, the business community is also doing its part. See the June 11th Pew Center report, "Climate Change Activities in the United States."