The European Union has stated that it does not consider the outcomes from the Durban Climate Conference in December 2011 (COP17) to be a new international agreement on climate change. As a result, it has decided to limit the market for certified emissions reductions (CERs) to the Least Developed Countries (LDCs), excluding other developing countries from 2013.

This means that, for example, Small and Vulnerable Economies (SVEs) in the Caribbean region and Small Island Development States (SIDS) will be unable to supply CERs to the EU’s Emissions Trading Scheme (ETS) from 2013, despite their vulnerability to climate change and their dependence on tourism and, by extension, the aviation industry for much of their income.

This Project Briefing examines some of the concerns and contradictions resulting from the EU decision to limit the market supply of CERs to LDCs only from 2013, and suggests that, for SVEs, there is an even greater need to ensure that the regulatory frameworks put in place to manage climate change are development-friendly, including at the national, regional and multilateral level.

Key points:

• The inclusion of the aviation industry in the European Union’s Emissions Trading Scheme (ETS) may set a precedent for the inclusion of similar sectors in the future
• The EU limit on its market for the supply of certified emissions reductions to the Least Developed Countries from 2013 excludes other countries vulnerable to climate change that depend on tourism
• Such countries could adopt carbon optimisation taxes, or develop national or regional ETSs.