Trades - Emissions Trading - Basics - Cap - Credits - Units - Carbon Trading

http://www.1mtx.com/markets-trades/en/index.php?language=en&menu=TRADES&punkt=Emissions_Trading&punkt2=Emissions%20Trading&index=Basics#Emissions%20TradingBasics Emissions trading or emission trading (carbon trading), or cap and trade, is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Emissions Trading : Basics Emissions trading or emission trading (carbon trading), or cap and trade, is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... Carbon emissions trading has been steadily increasing in recent years. According to the World Bank's Carbon Finance Unit, 374 million metric tonnes of carbon dioxide equivalent (tCO2e) were exchanged through projects in 2005, a 240% increase relative to 2004 (110 mtCO2e) which was itself a 41% increase relative to 2003 (78 mtCO2e)... Latest Updates... EEX European Energy Exchange - Market Information: Latest Datas Latest Updates... ...With the creation of a market for mandatory trading of carbon dioxide emissions within the Kyoto Protocol, the London financial marketplace has established itself as the center of the carbon finance market, and is expected to have grown into a market valued at $60 billion in 2007. The voluntary offset market, by comparison, is projected to grow to about $4bn by 2010. Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Cap - Credits - Units Carbon emissions trading is emissions trading specifically for carbon dioxide (calculated in tonnes of carbon dioxide equivalent or tCO2e) and currently makes up the bulk of emissions trading. It is one of the ways countries can meet their obligations under the Kyoto Protocol to reduce carbon emissions and thereby mitigate global warming. Cap - Credits: A central authority (usually a government or international body) sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups are issued emission permits and are required to hold an equivalent number of allowances (or credits) which represent the right to emit a specific amount. The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level. Companies that need to increase their emissions must buy credits from those who pollute less. The transfer of allowances is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than was needed. Thus, in theory, those that can easily reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest possible cost to society. The cap is usually lowered over time - aiming towards a national emissions reduction target. In other systems a portion of all traded credits must be retired, causing a net reduction in emissions each time a trade occurs. In many cap and trade systems, organizations which do not pollute may also participate, thus environmental groups can purchase and retire allowances or credits and hence drive up the price of the remainder according to the law of demand. Corporations can also prematurely retire allowances by donating them to a nonprofit entity and then be eligible for a tax deduction. Allowances are accounted for in the balance sheet of the company as intangible assets, as recommended by the IAS 38 issued by IASB. Because emissions trading uses markets to determine how to deal with the problem of pollution, it is often touted as an example of effective free market environmentalism. While the cap is usually set by a political process, individual companies are free to choose how or if they will reduce their emissions. In theory, firms will choose the least-cost way to comply with the pollution regulation, creating incentives that reduce the cost of achieving a pollution reduction goal. Emissions trading principles are based on proposals by the Technocracy movement of the 1930's. Technocracy proposed a system of Energy Accounting, or emissions trading, to promote balanced and harmonious development throughout the world. » Energy Accounting Units The units (in carbon emissions trading) which may be transferred under Article 17 (of the Kyoto Protocol) emissions trading, each equal to one metric tonne of emissions (in CO2-equivalent terms), may be in the form of: An assigned amount unit (AAU) A removal unit (RMU) An emission reduction unit (ERU) A certified emission reduction (CER) » more Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Carbon Trading versus Carbon Tax Carbon Trading (Emissions Trading) is sometimes seen as a better approach than a direct carbon tax or direct regulation. By solely aiming at the cap it avoids the consequences and compromises that often accompany those other methods. It can be cheaper, and politically preferable for existing industries because the initial allocation of allowances is often allocated with a grandfathering provision where rights are issued in proportion to historical emissions. In addition, most of the money in the system is spent on environmental activities, and the investment directed at sustainable projects that earn credits in the developing world can contribute to the Millennium Development Goals. Critics of emissions trading point to problems of complexity, monitoring, enforcement, and sometimes dispute the initial allocation methods and cap. » Millennium Development Goals (OECD Development Co-operation Directorate - About the Millennium Development Goals; OECD.org) Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Cap & Trade versus Baseline & Credit The textbook emissions trading program can be called a "cap & trade" approach in which an aggregate cap on all sources is established and these sources are then allowed to trade amongst themselves to determine which sources actually emit the total pollution load. An alternative approach with important differences is a baseline & credit program. In a baseline and credit program a set of polluters that are not under an aggregate cap can create credits by reducing their emissions below a baseline level of emissions. These credits can be purchased by polluters that are under a regulatory limit. Many of the criticisms of trading in general are targeted at baseline & credit programs rather than cap type programs. Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top The Economics of International Emissions Trading It may be possible for a country to reduce its emissions using a Command-Control approach with regulation, direct and indirect taxes. The problem with such an approach to abatement is that it may cost the economy more to reduce the same amount of pollution when compared to the 'Emissions Trading' scenario. The economic reason behind this extra cost is because of the different Marginal Abatement Costs (MAC) for taking action in different countries (e.g. China might need to spend only $2 to reduce a ton of CO2, whereas, say, Sweden or the USA might need to spend more to abate the same amount of CO2). Here the Marginal Abatement Cost refers to the cost spent to reduce an extra unit of pollutant or other emissions. Taking advantage of the difference in MAC's is the principle behind the international emissions trading markets. Example: Emissions trading can benefit both the buyer and the seller through 'Gains from Trade'. » more (Applying the economic theory - Prices versus quantities, and the safety valve) Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top » ...more Links ! » ...more Links Emissions trading is emerging as a key instrument in the drive to reduce greenhouse gas emissions. The rationale behind emission trading is to ensure that the emission reductions take place where the cost of the reduction is lowest thus lowering the overall costs of combating climate change. ... » Emissions Trading Schemes (defra.gov.uk) » Clean Air Markets (U.S. Environmental Protection Agency; www.epa.gov/airmarkets) Emissions trading, as set out in Article 17 of the Kyoto Protocol, provides for Annex I Parties to acquire units from other Annex I Parties and use them towards meeting their emissions targets under the Kyoto Protocol. ... » Emissions Trading (unfccc.int) » What is carbon trading? (News.BBC.co.uk) » The carbon market (Carbon trading - Q & A; Ft.com) » The World Bank Carbon Finance Unit (FAQ; carbonfinance.org) Point Carbon is a world-leading provider of independent news, analysis and consulting services for European and global power, gas and carbon markets... » PointCarbon (pointcarbon.com) » United Nations Framework Convention on Climate Change (UNFCCC.int) » UNFCCC Countries' 1990 to 2012 emissions targets (UNFCCC.int) » Carbon Glossary (Carbon-financeonline.com) » Glossaries (OTC Coal Glossary - Texas RECs Glossary - GHG Glossary - Weather Derivative Markets Glossary; new.evomarkets.com) » Guide to Climate Change (Climate forecast - Greenhouse effect - The carbon cycle - Feedback effects - Gulf Stream; News.BBC.co.uk) TRADES GLOSSARY A - Z Terms - Definitions Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top ...| Reports | Analysis | Opinions | Comments |... | Reports | Analysis | Opinions | Comments | Carbon Taxes and Keynesian Insanity One of the craziest arguments for cutting CO2 emissions is that the policy would promote jobs and clean economic growth by investing in alternative energy sources. Anatole Kaletsky, an economics writer for the London Times, is an excellent example of this Keynesian idiocy. This so-called economist argued that that severely restricting CO2 emissions would stimulate economic growth and employment because they would, now this is a good one, "have the effect on the world economy comparable to a large-scale war". (Digging beneath the gloom, Rupert Murdoch's Australian 29 November 2000). ..." Read more » (by Gerard Jackson - February 17, 2008; Safehaven.com) 'Obscenity' of carbon trading If we want to curb climate change, carbon trading won't do, argues Kevin Smith in the Green Room this week. From the Stern Review to Europe's Emissions Trading Scheme, he argues, the aim of reducing emissions has been perverted by neo-liberal dogma and corporate self-interest. ... Read more » (Kevin Smith - News.BBC.co.uk) EU's carbon trade 'set to fail' The EU's carbon trading scheme - deemed a key to tackling climate change - is set to "fail" yet again, says the WWF. The European Trading Scheme (ETS) was launched in 2005 to cut carbon dioxide (CO2) emissions, but its success was limited, partly due to lax limits. ... Read more » (13 June 2007 - News.BBC.co.uk) US pricing in ‘de facto $50 carbon price’ – Lash Wall Street financiers are effectively imposing a $50/tonne price of carbon dioxide on their investment decisions regarding new power generation in the US, according to the president of the World Research Institute (WRI). “There have been no new coal-fired power plants since TXU. All the new capacity is gas-fired,” Jonathan Lash, of the Washington, D.C.-based think-tank, told Carbon Finance at a briefing in London on Monday. “That implies a de facto price of carbon of something like $50/tonne,” he added. ... Read more » (13 February, 2008 - Carbon-financeonline.com) Moving the market ...January saw the start of Phase II of the EU Emissions Trading Scheme (ETS), coinciding with the beginning of the Kyoto Protocol’s 2008–12 commitment period. Until now, the EU market has largely worked in isolation, responding to European factors such as weather and fuel prices. But, so far this year, the market is also looking further afield for direction, chiefly to the US economy. ... Read more » (08 February, 2008 - Carbon-financeonline.com) Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top energy and nature » Slideshow: Emission (flickr.com) Take a break... ...Take a Break...Just Relax... The Emissions Trading System - putting a price on carbon The realities of carbon trading ...just relax... lakeside power station lakeside power station ADVERTISEMENT Cap, Credits, Units Trading : Tax Cap & Trade The Economics... » ...more Links ! ...| Reports | Analysis | Opinions | Comments |... ...Take a Break...Just Relax... ^ top Sources: Wikipedia; news.BBC.co.uk; Carbon-financeonline.com; defra.gov.uk; .1MTX 2008