Emissions trading is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. The concept is also known as cap and trade (CAT) or emissions trading scheme (ETS). One prominent example is carbon emission trading for CO2 and other greenhouse gases which is a tool for climate change mitigation. Other schemes include sulfur dioxide and other pollutants.
The spark spread is the theoretical gross margin of a gas-fired power plant from selling a unit of electricity, having bought the fuel required to produce this unit of electricity. All other costs must be covered from the spark spread. The term was first coined by Tony West's trading team on the trading floor of National Power Ltd in Swindon, UK during the late 1990s and quickly came into common usage as other traders realised the trading and hedging opportunities.
The European Union Emissions Trading System is a carbon emission trading scheme which began in 2005 and is intended to lower greenhouse gas emissions by the European Union countries. Cap and trade schemes limit emissions of specified pollutants over an area and allow companies to trade emissions rights within that area. The EU ETS covers around 45% of the EUs greenhouse gas emissions.
Flexible mechanisms, also sometimes known as Flexibility Mechanisms or Kyoto Mechanisms, refers to emissions trading, the Clean Development Mechanism and Joint Implementation. These are mechanisms defined under the Kyoto Protocol intended to lower the overall costs of achieving its emissions targets. These mechanisms enable Parties to achieve emission reductions or to remove carbon from the atmosphere cost-effectively in other countries. While the cost of limiting emissions varies considerably from region to region, the benefit for the atmosphere is in principle the same, wherever the action is taken.
European Energy Exchange (EEX) AG is a central European electric power and related commodities exchange located in Leipzig, Germany. It develops, operates and connects secure, liquid and transparent markets for energy and related products, including power derivative contracts, emission allowances, agricultural and freight products.
Carbon rationing, as a means of reducing CO2 emissions to contain climate change, could take any of several forms. One of them, personal carbon trading, is the generic term for a number of proposed carbon emissions trading schemes under which emissions credits would be allocated to adult individuals on a (broadly) equal per capita basis, within national carbon budgets. Individuals then surrender these credits when buying fuel or electricity. Individuals wanting or needing to emit at a level above that permitted by their initial allocation would be able to purchase additional credits in the personal carbon market from those using less, creating a profit for those individuals who emit at a level below that permitted by their initial allocation.
Cap and Share is a regulatory and economic framework for controlling the use of fossil fuels in relation to climate stabilisation. Originally developed by Feasta, the foundation believed that climate change is a global problem and that there is a need to cap and reduce greenhouse gas emissions globally, the philosophy of Cap and Share maintains that the Earth’s atmosphere is a fundamental common resource. Consequently, it is argued, each individual should get an equal share of the benefits from the limited amount of fossil fuels that will have to be burned and their emissions released into the atmosphere in the period until the atmospheric concentration of greenhouse gases has been stabilised at a safe level. Given the vast discrepancies in fossil fuel use between the wealthy and poor on a global level, Cap and Share would have a highly progressive economic effect, reducing inequality and helping to support climate justice and the energy transition in the Global South.
Carbon pricing is a method for nations to address climate change. The cost is applied to greenhouse gas emissions in order to encourage polluters to reduce the combustion of coal, oil and gas – the main driver of climate change. The method is widely agreed and considered to be efficient. Carbon pricing seeks to address the economic problem that emissions of CO2 and other greenhouse gases (GHG) are a negative externality – a detrimental product that is not charged for by any market.
The CRC Energy Efficiency Scheme was a mandatory carbon emissions reduction scheme in the United Kingdom which applied to large energy-intensive organisations in the public and private sectors. It was estimated that the scheme would reduce carbon emissions by 1.2 million tonnes of carbon per year by 2020. In an effort to avoid dangerous climate change, the British Government first committed to cutting UK carbon emissions by 60% by 2050, and in October 2008 increased this commitment to 80%. The scheme has also been credited with driving up demand for energy-efficient goods and services.
The UK Emissions Trading Scheme is the carbon emission trading scheme of the United Kingdom. It is cap and trade and came into operation on 1 January 2021 following the UK's departure from the European Union. The cap is reduced in line with the UK's 2050 net zero commitment.
Carbon emission trading (also called carbon market, emission trading scheme (ETS) or cap and trade) is a type of emission trading scheme designed for carbon dioxide (CO2) and other greenhouse gases (GHG). It is a form of carbon pricing. Its purpose is to limit climate change by creating a market with limited allowances for emissions. This can lower competitiveness of fossil fuels and accelerate investments into low carbon sources of energy such as wind power and photovoltaics. Fossil fuels are the main driver for climate change. They account for 89% of all CO2 emissions and 68% of all GHG emissions.
The Chinese national carbon trading scheme is an intensity-based trading system for carbon dioxide emissions by China, which started operating in 2021. This emission trading scheme (ETS) creates a carbon market where emitters can buy and sell emission credits. The scheme will allow carbon emitters to reduce emissions or purchase emission allowances from other emitters. Through this scheme, China will limit emissions while allowing economic freedom for emitters. China is the largest emitter of greenhouse gases (GHG) and many major Chinese cities have severe air pollution. The scheme is run by the Ministry of Ecology and Environment, which eventually plans to limit emissions from six of China's top carbon dioxide emitting industries. In 2021 it started with its power plants, and covers 40% of China's emissions, which is 15% of world emissions. China was able to gain experience in drafting and implementation of an ETS plan from the United Nations Framework Convention on Climate Change (UNFCCC), where China was part of the Clean Development Mechanism (CDM). China's national ETS is the largest of its kind, and will help China achieve its Nationally Determined Contribution (NDC) to the Paris Agreement. In July 2021, permits were being handed out for free rather than auctioned, and the market price per tonne of CO2e was around RMB 50, far less than the EU ETS and the UK ETS.
China Beijing Environmental Exchange (CBEEX) is a corporate domestic and international environmental equity public trading platform initiated by the China Beijing Equity Exchange (CBEX) and authorized by the Beijing municipal government.
The New Zealand Emissions Trading Scheme is an all-gases partial-coverage uncapped domestic emissions trading scheme that features price floors, forestry offsetting, free allocation and auctioning of emissions units.
The Climate Change Response Amendment Act 2008 was a statute enacted in September 2008 by the Fifth Labour Government of New Zealand that established the first version of the New Zealand Emissions Trading Scheme, a national all-sectors all-greenhouse gases uncapped and highly internationally linked emissions trading scheme.
An Emissions Trading Registry is a web-based application that records:
The Clean Energy Act 2011 was an Act of the Australian Parliament, the main Act in a package of legislation that established an Australian emissions trading scheme (ETS), to be preceded by a three-year period of fixed carbon pricing in Australia designed to reduce carbon dioxide emissions as part of efforts to combat global warming.
Climate change has resulted in an increase in temperature of 2.3 °C (2022) in Europe compared to pre-industrial levels. Europe is the fastest warming continent in the world. Europe's climate is getting warmer due to anthropogenic activity. According to international climate experts, global temperature rise should not exceed 2 °C to prevent the most dangerous consequences of climate change; without reduction in greenhouse gas emissions, this could happen before 2050. Climate change has implications for all regions of Europe, with the extent and nature of impacts varying across the continent.
South Korea’s Emissions Trading Scheme (KETS) is the second largest in scale after the European Union Emission Trading Scheme and was launched on January 1, 2015. South Korea is the second country in Asia to initiate a nationwide carbon market after Kazakhstan. Complying to the country’s pledge made at the Copenhagen Accord of 2009, the South Korean government aims to reduce its greenhouse gas (GHG) emissions by 30% below its business as usual scenario by 2020. They have officially employed the cap-and-trade system and the operation applies to over 525 companies which are accountable for approximately 68% of the nation’s GHG output. The operation is divided up into three periods. The first and second phases consist of 3 years each, 2015 to 2017 and 2018 to 2020. The final phase will spread out over the next 5 years from 2021 to 2025.
