Japan, the world's fifth-biggest producer of greenhouse gases, is building a new emissions market as the widest carbon-trading spreads in four months signal that the 1997 Kyoto climate agreement will be scrapped.
Credits for 2012 in the United Nations market, set up after the Kyoto accord, traded at 3.95 euro (¥445) less than those in the European Union's cap-and-trade program as of Nov. 3. That's the biggest difference since June 14 and compares with 2.39 euro at the start of the year.
Traders are selling U.N. credits on concern they will have little value after 2012, when the Kyoto targets expire, as they speculate the U.S. and China will fail to agree on new limits being considered at this month's climate summit in Cancun, Mexico. That is prompting Japan to build an emissions-trading system independent of the U.N., through individual agreements with other nations.