German Chancellor Angela Merkel called on Saturday for the European Union's Emissions Trading System (ETS), the bloc's flagship policy to cut greenhouse gas emissions, to become a global system.
Thousands of power plants, factories and airlines in Europe have to surrender an allowance for every tonne of heat-trapping gas emitted. However, a surplus of allowances has depressed their price on the ETS and has made it cheaper to burn coal than to switch to greener fuels.
"This instrument would of course be particularly effective if we could introduce it beyond Europe because then we'd have the same general framework around the world," Merkel said in her weekly video podcast.
"And that would enable us to expand the certificate trading to further areas, even in Europe," she added.
On Tuesday Merkel is due to speak at the Petersberg Climate Dialogue in Berlin, a conference where ministers from around the world will prepare for a United Nations climate conference in Paris later this year.
Merkel said that while a discussion about the price of carbon emissions and a global system was likely, she feared that no agreement would be reached yet.
Earlier this month the European Union agreed a deal to start reforming the ETS, the world's biggest carbon market, from Jan. 1 2019, opening the way for a more radical shake-up of the trading system.
(Reporting by Michelle Martin; Editing by Elaine Hardcastle)
