International Carbon Markets
Carbon emissions trading is emissions trading specifically for carbon dioxide and other greenhouse gas emissions recognized by the Kyoto Protocol, calculated in tonnes of carbon dioxide equivalent or tCO2e).
Carbon trading is one of the ways countries can meet their Kyoto obligations to reduce carbon emissions and thereby mitigate global warming.
National and Regional Cap and Trade Systems
There are several national and regional trading schemes up into place, such as the EU ETS (European Union Emission Trading Scheme), California Cap and Trade Program, Québec (Canada), Tokyo Government Scheme, New Zealand etc. Other trading systems are currently emerging in China (7 pilot regional CO2 schemes) and several countries from South America.
South Korea launched a nationwide CO2 emissions trading scheme in early 2015, becoming the second largest carbon market, after EU ETS European CO2 market. At the same time, Mexic has announced its intention to launch the CO2 emissions market in 2017.
The long term goal is to have an international carbon market in which all these CO2 trading schemes and mechanisms to be linked and inter-connect.
We will be happy to offer you more information related to these national or regional carbon schemes if you are interested in a specific issue. Just call us.
CO2 Market Trends
Carbon emissions trading has been steadily increasing in recent years. In terms of value, the World Bank has estimated in State and Trends of the Carbon Market 2012 that the size of the carbon market was €126 billion, and transaction volumes reached a high of 10.3 billion tons of carbon dioxide.
The European Commission has proposed five measurable EU targets for 2020 that will steer the process of de-carbonisation and translate into national political and economic targets. These targets are categorized under: employment, research and innovation, climate change and energy, education and the combating of poverty. For climate change and energy, the goals for 2020 are;
- increase renewable energy use by 20%
- increase energy efficiency by 20%
- reduce greenhouse gas emissions by 20% as compared to 1990 levels.
On the long term, the tendency of big polluting companies is to replace fossil fuels with “low carbon”technologies. This should be a gradual process, as it is suggested below: