Who said creating a market in carbon emissions was going to be easy?

Policymakers worldwide are watching with interest as the European Union’s fledgling carbon emissions market rides out the turbulence created by its first annual official report, which today confirmed a 45-million-ton gap between total carbon emissions and carbon allocations for 2005. While Europe faced a quandary over surplus pollution credits, Canadian representatives indicated that their nation will not meet Kyoto Protocol goals for 2012. Canada’s Environment Minister, Rona Ambrose, was widely quoted Friday in reports of that government’s increasingly cold feelings about Canada’s position in the Kyoto climate agreements:

“Frankly, when Canada makes up 2 per cent of the global emissions, I believe that the best way for Canada to participate in the global environment is by developing and deploying clean technologies to those countries that actually are the largest contributors to greenhouse gas emissions; that is the United States, China and India.”

Canada is apparently trying to edge out of the climate agreements–but others can’t wait to get in. Seattle-area King County announced intentions today to become the first US county to join the two-and-a-half-year-old Chicago Climate Exchange, North America’s unique voluntary greenhouse gas emissions exchange, which operates outside of Kyoto Protocol mandates. King County Executive Ron Sims stated:

“This is the time when carbon markets are maturing and the rules are being written. The victory goes to those playing the game… In the world of carbon emissions trading, you can’t win if you don’t play. And you can’t credibly affect future rules if you are not actually engaged in the existing market forums.”

There isn’t any indication yet that nations in the EU emissions trading scheme are feeling like “winners,” though. Minister Ambrose chairs the UN climate-change conference in Bonn this week amid German promises to retroactively cut their carbon emissions allocations for last year. Too bad cutting actual emissions is a little trickier.