Spain, Ireland join cheap carbon credit chase

By Gergely Szakacs

BUDAPEST (Reuters) - Spain and Ireland want to use a cheap option for meeting their Kyoto greenhouse gas emissions targets using European Bank for Reconstruction and Development (EBRD) funds, national news agency MTI said on Wednesday.

Spain and Ireland would be joining the Netherlands and Japan in meeting caps on greenhouse gas emissions using an alternative route to domestic action which some academics and environmentalists say is undermining the Kyoto Protocol.

Kyoto has set greenhouse gas emissions limits during 2008-12 on some 37 industrialized countries, effectively giving them a quota of emissions rights.

If one country is well within its cap it can sell those surplus rights called Assigned Amount Units (AAUs) and Russia for example has more surplus AAUs than the shortages of all other Kyoto countries combined.

That cheaper, alternative route has drawn criticism not only from environmentalists but also from carbon traders who want to make money from selling carbon offsets to countries struggling to meet their Kyoto caps.

The Hungarian Environment Ministry told Reuters it was considering selling AAUs equivalent to 10 to 15 million tons of carbon dioxide emissions.

"At this stage Hungary is considering selling 10-15 million AAUs which may be followed by further quantities," a spokeswoman said on Wednesday.

MTI quoted the EBRD saying it wanted to buy AAUs from Hungary for Spain and Ireland to count towards their Kyoto goals.