Carbon emissions trading

Burtraw, D., Palmer, K., Bharvirkar, R., Paul, A., 2001. The Effect of Allowance Allocation on the Cost of Carbon Emissions Trading. RFF Discussion Papers 01-30. 

Following on from Kyoto, the Fourth Conference of the parties took place in Buenos Aires in November 1998, the aim being to clarify key concepts and mechanisms. The most important of these was the clean development mechanism , which aims to channel funds into developing countries for the deployment of clean technologies. The carbon emission trading mechanism was also discussed. Through this, parties to the convention will be able to purchase permits, which on balance should lead to overall reductions in emissions. 

Green, K., et al. (1999). Climate Change Policy Options and Impacts Perspectives on Risk Reduction, Emissions Trading, and Carbon Tax. Los Angeles Reason Public Policy Institute. 

If a hue monetary value were established for carbon emissions, nuclear power could be the major beneficiary of an emissions credit trading market. Nuclear power advocates - and environmental advocates - need to play an active role in setting the regulatory framework that will advance our environmental interests. 

Pretty, J.N. and Ball, A. 2001. Agricultural Influences on Carbon Emissions and Sequestration A review of Evidence and the Emerging Trading Options. Centre for Environment and Society, University of Essex. 

Cap and Trade In an attempt to reduce carbon emissions by industries, some governments and analysts support a "cap and trade" system. First, an overall "cap" is placed, by government regulation, on total carbon emissions for particular companies and/or their industries. The "trade" part of cap and trade allows companies that operate efficiently on a carbon basis, and thereby emit a lower amount of carbon than law allows, to sell or trade the unused... 

IETA is a leading association in the carbon emissions cap and trade industry. It sponsors research, publications and conferences on a worldwide basis. 

Carbon Trust, 2004. The European Emissions Trading System Implications for Industrial Competitiveness, Carbon Trust, London [available athttp //www.carbontrust.co.uk/default.ct],... 

National Statistics, 2002. United Kingdom National Accounts Blue Book, and further information provided by National Statistics. Oxera, 2004. C02 Emissions Trading How Will it Affect UK Industry Report prepared for The Carbon Trust [available at www.oxera.com]. 

Once the additional profits due to grandfathering are accounted for, however, all companies benefit from emissions trading under both scenarios presented in Table 4. As coal- and other carbon-intensive companies (such as RWE, STEAG AG and Vattenfall Europe) receive relatively large amounts of C02 emission allowances for free, they benefit relatively more from this effect of emissions trading on firms profits. 

But any policy that internalizes the carbon price without raising revenue (such as emissions trading with free allocation) suffers these tax-interaction effects without the benefit of the... 

If governments want to compensate investors for adjustment to regulation/legislation, this would motivate some free allocation of allowances during a transitory period to compensate investors who made investment decisions before there was any reasonable expectation of carbon controls. Different views exist about when this was. Most of those involved in the international process would argue it to have been 199017 or a couple of years thereafter.18 Later relevant landmarks include the adoption of the Kyoto Protocol in 1997, the EU s Green Paper on emissions trading in 2000, and the EU s ratification of the Protocol and adoption of the ETS Directive in 2002. Whatever year is considered applicable, however, as time passes fewer and fewer investments will be able to make the claim that costs were sunk before a reasonable expectation of carbon controls. 

A cap and trade mechanism where emitting industries are required to purchase permits for part or all of the carbon emissions. 

A mandatory cap on carbon emissions, for example, could be enforced by a requirement that suppliers and users of fossil fuels hold tradable rights for each ton of carbon they produced—the so-called cap and trade approach. This would have the effect of placing a price on carbon emissions that would eventually be included in the price of all goods and services. Environmentally benign technologies, like those based on hydrogen, would... 

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