Carbon Trading
The European Union (EU) launched the world's first carbon trading scheme. Its aim is to force down industrial emissions of greenhouse gases and so moderate global warming, while preserving the competitiveness of European companies.
Under the scheme, companies are issued with pieces of paper that grant them permission to emit a certain quantity of CO2 the atmosphere in a particular year. Companies that do not have enough permissions to cover their emissions will have to buy them in from someone who does.
But if governments seriously want to use industry trading to meet their Kyoto targets, then the industries covered by the scheme have to widen. Emissions permits for other greenhouse gases, such as methane, will also have to be issued and traded. And in future, governments might up the ante by auctioning allocations of emissions permits, rather than simply handing them out.
One area of confusion will be the relationship between this commercial market in carbon and the various trading systems included in the Kyoto protocol itself. There are in essence two separate markets: for companies, which have to meet targets imposed by governments; and the other for governments themselves, which have internationally agreed targets for national emissions.
This will mean that there could be two different prices for carbon. Analysts agree this will be confusing, but say that if governments could buy or sell their national entitlements to emit CO2 there would be chaos.
Related Products
August 04, 2010
Price: $219.00
August 05, 2010
Price: $219.00