Shell CEO Calls for Global Carbon Market to ‘Level’ the Field

July 1 (Bloomberg) -- Royal Dutch Shell Plc’s chief executive officer called on lawmakers and investors to move toward a global carbon market and a “level playing field” in the fight against climate change.

Investors have yet to get the signals they need to set long-term strategies for cutting emissions and participating in an integrated global market, CEO Peter Voser said in an interview today at the European Business Summit in Brussels.

“In Europe, we have the emissions-trading system, which is a viable way forward, but ultimately we need a global mechanism,” he said. “I think it will take longer than a couple of years, but the important thing is that we start, and we can adjust during the time.”

The European Union’s ETS program, the world’s largest cap- and-trade system, covers about 12,000 installations that need allowances for each ton of carbon dioxide they emit in burning fossil fuels. Those that produce more than their cap need to buy more permits; those that emit less can sell their surpluses. The value of transactions in the system rose to $118 billion last year, according to World Bank data.

The EU is “very committed” to linking up with carbon- trading programs in other countries by 2015, Jos Delbeke, director general at the European Commission’s climate department, said in March.

In the U.S., a cap-and-trade proposal to limit greenhouse- gases by letting polluters buy and sell emission allowances passed the House last year and stalled in the Senate. Senators John Kerry and Joseph Lieberman unveiled a revamped cap-and- trade bill last month and are pushing for passage this year.

The Cost of Waiting

Australia’s Prime Minister Julia Gillard, who took office last month, said she will restart efforts to put a price on carbon emissions should she succeed in the election she plans to call in “coming months.” Her predecessor Kevin Rudd delayed the carbon-trading plan amid opposition from lawmakers.

China will likely set up a domestic market for trading carbon emissions by 2014, Feng Shengbo of the China Clean Development Mechanism Management Center said in May.

“The more we wait, the more we, large investors, have uncertainties about the future CO2 price and the mechanism how the price is established,” Voser said. “This may slow down certain investment, and that’s what we don’t want.”

Voser predicted carbon prices will advance in coming years. EU permits for December traded as high as 15.29 euros a metric ton today on London’s European Climate Exchange, rising 22 percent so far this year amid signals that the global economy is recovering from recession.

“In Shell, we use $40 per ton and we use this for all our projects across the world,” Voser said. “Compared to where it is today, we see an increase.”