Reuters 4 Jul 08;
(Reuters) - Companies and governments are turning to emissions trading as a weapon to fight climate change, in a carbon market worth $64 billion last year.
Cap and trade schemes force participants -- often energy-intensive industries -- to buy permits to emit greenhouse gases such as carbon dioxide, which is produced from burning fossil fuels.
Australia's leading climate guru Ross Garnaut on Friday laid out a draft carbon trading scheme, to be launched in 2010, to rein in rising emissions in the world's top per-capita greenhouse gas polluter.
New Zealand's carbon market said on Thursday it was in a position to become Asia's leading market for trading in greenhouse gas emissions when it starts up in early 2009.
The European Union launched its cap and trade scheme in 2005, while Canada is set to launch a market of its own in 2010.
U.S. senators last month defeated a proposed federal U.S. climate change bill which included cap & trade.
In another type of carbon market, countries and companies can trade carbon offsets under three, UN-led Kyoto Protocol schemes. The schemes allow rich countries to earn emission permits by investing in cuts in greenhouse gases in other countries.
A full list of established and proposed schemes follows.
INTERNATIONAL SCHEMES
KYOTO PROTOCOL (United Nations) (1)
Launched: 2005
Mandatory for 37 rich countries
Target: 5 percent reduction in 1990 emissions by 2008-2012
Contains three sub-schemes to help signatories meet targets:
1- Clean Development Mechanism (CDM): Rich countries can
invest in clean energy projects in developing nations
2- Joint Implementation (JI): Rich countries can invest in
clean energy projects in former communist countries
3- Assigned Amount Units (AAUs): Signatories can trade
surplus emissions rights among themselves
First commitment period expires in 2012 and governments scrambling to negotiate a successor agreement
EU ETS - European Union Emissions Trading Scheme (2)
Launched: 2005 (Phase 1: 2005-2007, Phase 2: 2008-2012, Phase 3: 2013-2020)
Mandatory for 27 nations in EU
Covers around half of all EU emissions
Target: Reduce EU ETS emissions by 21 percent by 2020 compared to 2005 levels
Worth $50 billion in 2007 (3)
UNITED STATES
Mandatory cap & trade scheme proposed under Lieberman-Warner Climate Security Act was rejected by the U.S. Senate in June, but many observers expect either presidential candidate to introduce new climate legislation within first six months of their presidency.
CANADA (4)
Launch: 2010
Mandatory for all 10 provinces and three territories
Target: Reduce 2006 emissions by 20 percent by 2020
Scheme covers 50 percent of Canada's emissions
Potential problems: Alberta already has a provincial scheme and several provinces have joined U.S. regional schemes
JAPAN (5)
Currently a voluntary scheme (JVETS), and government trialing a mandatory scheme in autumn 2008
Target: Cut emissions by 14 percent below current levels by 2020
JVETS - Launched: 2005
Target: Cut emissions from a 2002-2004 average, using government-subsidized clean energy equipment
AUSTRALIA (6)
Launch: 2010
Mandatory - to cover some 70 percent of Australian emissions
Target: First cap (2010-2012) to cut emissions to 8 percent above 1990 levels (Australia's Kyoto target). Subsequent caps "should reflect increasing levels of ambition" and move country towards long-term goal of reducing 2000 emissions by 60 percent by 2050
NEW ZEALAND (7)
Launch: 2008
Mandatory - includes forestry in 2008, power & industry in 2009, transport in 2011 and agricultural waste from 2013.
Target: To be announced
Appointed to be VCS (Voluntary Carbon Standard) registry
Sources: (1) UNFCCC
(2) European Commission
(3) World Bank
(4) Environment Canada
(5) Japanese government
(6) Australian government
(7) New Zealand government
(Compiled by Michael Szabo; Editing by James Jukwey)
