Emissions Trading Development Assignment
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Added on 2020-10-17
Emissions Trading Development Assignment
Added on 2020-10-17
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Chapter oneThe concepts and theories that explain related plans to trade emissions:Firstly-the global snapshot toward the development of the emission trading :First of all, there are many countries that try to eliminatetheir emission greenhouse gases (GHG). Then, according to(Ralf1 et al 2007) emission trading schemes has beendeveloped till 2007 that are around five schemes at all theworld. In addition, their schemes are divided such as; the EUGHG emissions Trading Scheme, the New South Walesgreenhouse gases elimination Scheme,the Chicago ClimateExchange,the Norwegian mandatory domestic emissionstrading scheme, and the Japanese voluntary emission tradingschemes.For more details about all five schemes, there is a snapshot as follow:2The first is Australia: on one of January 2003, the New South WalesGreenhouse Gas Reduction Scheme (GGAS) work to decrease theirgreenhouse gas emission because of their production and the useelectricity,in May 2007the Prime Ministerial Task Group (PMTG) onemissions trading puta domestic emissions trading scheme that berelated to schemes at other countries. Also, in the same year, specificallyin the third of June, PTMG presented a plan cap and trade for carbonemissions.3The second is Canada; the Government of Canada announced a freeplan to reduce emissions of greenhouse gases on April 26, 2007. Also, thisplan insures that emissions trading should be a necessary component inthe government’s market-driven approach. This plan includes both adomestic inter-firm trading system and a domestic offset systemthat iseasier for the company to participate in the clean development1 - Ralf A. - Bernd H.- Peter L., Emissions Trading: Institutional Design, Decision Making and Corporate Strategies,Library of Congress Control Number: 2008921861, 2008, p13, available at:www.willylibrary.com.2 - Ralf A. - Bernd H.- Peter L., op cit,pp 14:17.3 -Ibid,P14.1
mechanism,also, includes aplanperthe sixkinds of greenhouse gasthatcausethe problem ofglobal warmingwith the rest ofthe pack emissionssystemsin Americaand Mexico .Infact, there is the actualcooperationbetweentwo provincesin Canadaare British Columbia and Manitobawiththefivestates ofAmericato establish aplan whichfaces theimplementation of theemissions tradingthat servesallprovincestogether.4In April 2005 in Japan, a domestic Voluntary Emissions Trading Schemeis being started according to the voluntary United Kingdom Emissions Trading System (UK ETS), it began from 2002 till 2006 with 31 members but the second period of the system for one year with 58 members, partly,the costreduction activities forgreenhouse gas emissionsreached ten trillionper ton ofcarbon dioxide.5New Zealand, the New Zealand Institute for Economic Research (NZIER)put an initiative scheme on March in 2007 that it contents recognized allthe kinds of GHG; in addition to that it includes the upstream anddownstream approach.6Norway, a mandatory domestic greenhouse gas emission tradingschemes had been implemented by the government of Norway from 2005to 2007 according to European Union greenhouse gas emission tradingact. This scheme encompasses all kinds causing of co2 that free from co2taxation.7South Korea, the government of South Korea try to establish a domestic carbon credit market at the end of 2007, then, the government accept officially fifty projects that aimed to decrease GHG.Also, there will be a possibility to sold the credit as a certified emission reduction, it should be sold in two ways: the first, if it meet the market standards, the second, if it sold to the government for a fixed price.8Switzerland, the government of Switzerland focuses toward the companies which bear legally obligations because of their emissions. In according to these companies would be exempted from co2 taxation that is started from January 2008.9United States of America, the first voluntary scheme at ChicagoClimate Exchange(CCE) which was started in 2003 with13 participates4 -Ibid,P15.5 -Ibid, P15.6 -Ibid,P15.7 -Ibid, P16.8 -Ibid.9 -Ibid.2
that included all kinds of GHG.While, in 2005,but now,CCE has 300participates from all sectors and offset projects. After that,RegionalGreenhouse Gas Initiative (RGGI) is cooperation consists of nine states,RGGI aimed to improve mandatory market-based cap-and-trade programfor the electric power sector.10In the direction todevelopment, there isCalifornia’s Global Warming Solutions Act to solve the problemglobalwarming which aims toreduceemissionsin accordance with thebaseyear1990inthe Kyoto Protocoluntil 2020, andaccording to this lawunitedfivestates ofAmericaandtwo provincesin Canadaas an initiativeof climate changeforWestern countriestoCreate a mechanismreduceemissionsthat dependon the market.11The researcher concludefrom the above that,tradeplansemissionare eithermandatory or voluntary,asthere are manyplansat the level ofmost countries,and these plans basedon twomain factors: thefirst, reducing emissions ofthe six ofgreenhouse gases, especially carbon dioxide, the second, motivatepolluterstoreducetheir emissionsbythe government whomaking plansfor emissions trade.Secondly- the concept of emissions trading:The problem ofenvironmental pollution, especially airpollutionis very serious andit requires more attention andinterest particularly after the increased activityof the humanelement,as a result ofthis interestat the international levelthe Kyoto Protocol12 .It was issued in1998 withthe UnitedNations Conventionon Climate Change, the Kyoto Protocolhasflexiblemechanismswork to reduceemissions, such asemissions tradingandclean developmentand jointimplementation. In according to George et al13Kyoto Protocoldepends on thecap and tradeprogramwhich setsthe targetofgreenhouse gas emissionsreduction, and it facilitates the entryofcompanies inthe stage oftradeorcarbonpermit are allowedbetween companies andindividualentities.Thecost oftheKyotoCalculatedas the differencebetween eachscenarioof10 -Ibid, P17.11 -Ibid.12 - For more details see to Kyoto Protocol to the United Nations Framework Convention on ClimateChange,United Nations,1998.13 -George M.- Alison, Deborah S.C., A Review of Carbon Trading Theory and Practice, 2007,P2, Electronic copyavailable at: http://ssrn.com/abstract=989271.3
zerocostunder the usualsystembusinessandthe scenarioatleastcost.Also, the difference representsthistotalemissionreductionaccording tothe Kyotoprofile.14In according to both Jan and Heinrich15Emissions tradingasa tooleconomicalmorefavorable thanother economictoolstodealcarbon dioxideemissions. Also, it can be describedas atoolofeconomicsufficiency and efficiencywhich leads thedecision-makerswithin thecompaniesto re-design decision-making processesandmanagementcreativity.16Dominik et al17define emissions tradingasan administrativeapproachused tobe by the government tocontrolpollutionthrougheconomicincentives that grant topollutersto reducetheir emissions.In addition, Ralf et al18 defines tradable emission permit asan instrumentinnovativerelativelyinenvironmental policyaround the world. One of the carbon commoditiesare traded incarbonmarketclean development is the creditemissionwhichis used inemission reductionprojectsin developing countries,andthe clean developmentmarketis set upto encourage theprivatesector totransfer the technicalenvironmental fromdeveloped countries.19The researcherbelieves thatemissions tradingmaybe consideredas an environmental toolPolicyaimed tothe managementof climate changefor encouraging14 - Umberto C. - Alessandro L.- Francesco P.,Kyoto Protocol and Emission Trading: Does the US make a difference?,CLIM – Climate Change Modelling and Policy,2001,P3,available at http://papers.ssrn.com/abstract=293660 or http://www.feem.it/web/activ/_activ.html.15 -- Heinrich T.- Jan Z.,Business and emissions trading from a public choice perspective – waiting for a newparadigm to emerge, a chapter of book which is Emissions Trading: Institutional Design, Decision Making andCorporate Strategies,2006,P42.Available at www.willy.com.16 - Ibid.17 --Dominik M.- Massimo G.- Anke E.- Otto R., Design of Emission Allocation Plans and Their Effects onProduction and Investment Planning in the Electricity Sector, a chapter of book, Emissions Trading:Institutional Design, Decision Making and Corporate Strategies, 2011,P72, Springer Heidelberg DordrechtLondon New York.18 - Ralf A. - Bernd H.- Peter L.,op cit,P42.19 - Adam G.- Diana M.,Accumulation by Decarbonisation and the Governance of Carbon Offsets,Vol. 84 No. 2 2008, P132, Clark University,www.economicgeography.org.4
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