“BERLIN — On a cold afternoon in late November, Jan Gerrit Otterpohl eyes the chimneys of Berlin’s Heizkraftwerk Mitte, a state-of-the-art power plant that supplies the city with heat and electricity. It’s not the billowing steam he’s interested in, but the largely invisible carbon dioxide that the power station exhales as it burns natural gas.
Under European Union rules, the plant’s operator, Vattenfall, needs a permit for each ton of carbon dioxide it emits. Otterpohl’s job is to keep costs low by making sure the company buys only as many permits as necessary, at the current market price.
Economists say that carbon markets like the one Otterpohl uses can become a powerful tool in the fight against climate change, by giving emitters a financial incentive to reduce greenhouse gases. But despite making progress in other areas, governments have for years been unable to agree on the rules that would allow truly global trade in carbon permits to flourish.”