UK and California agrees carbon deal

Tony Blair, on a tour of the USA, and California's Governor Arnold Schwarzenegger, yesterday announced that Britain and California are to sign a new carbon trading agreement.

The deal could long term see California enter the European carbon trading market, which was established by the Kyoto protocol in 1997.

The deal could long term see California enter the European carbon trading market, which was established by the Kyoto protocol in 1997. If a success, the move would enable polluting US businesses to buy carbon permits from 'greener' European companies, thereby providing a financial incentive for US companies to cut their carbon dioxide emissions.

The cross Atlantic deal effectively side-steps President Bush, who have rejected the Kyoto protocol and any agreement on a forced reduction of US carbon emissions. A further blow to the Presidents authority on this matter is likely to follow today when London and Los Angeles is expected to announce a city-to-city agreement on carbon emissions.

California has in recent years suffered from power cuts. Governor Schwarzenegger has made the environment a key issue, calling for California's emissions to be reduced to 2000 levels by 2010 and 1990 levels by 2020.