Some local governments (e.g. Boulder, Colorado, USA; British Columbia, Canada) and early-action countries (Sweden, Finland, and Netherlands in the 1990s) have implemented carbon taxes. Over time, however, a cap-and-trade orientation has begun to dominate policy approaches.

In simple terms, a cap-and-trade sets a target for [...]]]> Why cap-and-trade instead of a carbon tax?
(Abhishek Uppal)

Some local governments (e.g. Boulder, Colorado, USA; British Columbia, Canada) and early-action countries (Sweden, Finland, and Netherlands in the 1990s) have implemented carbon taxes. Over time, however, a cap-and-trade orientation has begun to dominate policy approaches.

In simple terms, a cap-and-trade sets a target for emissions in a geographic region consistent with a carbon stabilization level (i.e. 450 ppm). The cap is then pushed down to individual industries and companies that are given permits to emit that can be traded. These permits can be auctioned or provided for free. In either case, for markets to function properly, clear rules of private ownership must be established for what was, initially, a public good. Once emissions permits have been allocated, companies can then trade excess or deficits in their permits. The trading system can also include credits from other geographies. There are other important issues, such as sector coverage and banking and borrowing of credits that are important parts of the architecture of cap-and-trade regimes.

While either a tax or a cap-and-trade system can address greenhouse gas reductions, cap-and-trade has a number of advantages. Cap-and-trade drives efficient mitigation by encouraging businesses with inexpensive mitigation opportunities to reduce emissions as much as possible and sell excess credits to businesses with higher marginal mitigation costs. It allows Ricardo’s theory of comparative advantage to work with emissions mitigation. We recognize that markets with public goods are less efficient than standard markets, but believe that the advantages of a market approach outweigh the disadvantages. The result of a carbon market – even one with suboptimal efficiency – is that those who can reduce emissions most efficiently are able to free up resources for those who cannot, and emissions reductions are therefore achieved at the lowest total cost to the economy.

A cap-and-trade system also allows the market to set the appropriate price of carbon, whereas in a tax regime, regulators would need to try to derive that price. The principal disadvantage of cap-and-trade is that price is less certain, and there is potential volatility. Inclusion of flexible mechanisms in a cap-and-trade regime, such as offsets, banking and borrowing, brings measures of stability to the market and mitigates the biggest disadvantage of cap-and-trade. Clear signals from regulators – which are at the origin of demand for carbon credits – can also help to bring long-term stability to the markets. While faith in market mechanisms has been shaken by the credit crisis, and there has been talk that could potentially lead to more focus on a carbon tax rather than a cap-and-trade regime, we believe that the benefits of cap-and-trade outweigh the disadvantages.

While the UNFCCC and Kyoto Protocol do not specify that carbon must be priced, the Kyoto Protocol includes explicit mechanisms to permit emissions trading. Policy options such as the Clean Development Mechanism and Joint Implementation enable international cap-and-trade mitigation at least cost. Through these mechanisms – and the growing European Union Emissions Trading Scheme (EU-ETS) – cap-and-trade is growing in prominence year by year. The International Carbon Action Partnership (ICAP), which shares best practice in carbon trading schemes across borders, and other initiatives are promoting global linkages between and scaling of cap-and-trade regimes. The US is looking at its options for creating a cap-and-trade system through the Liebermann-Warner and the Dingell-Boucher bills, and as well as other proposals before the House and Senate. The importance of a robust global solution continues to grow.

Why carbon pricing isn’t enough at the initial stage.
While in theory, an adequate carbon price should be all that is required to achieve efficient mitigation. In the real economy, this is not always the case.

There are a number of mitigation policy options that are viable at a negative carbon price in 2030 (i.e. they save costs). Many of these opportunities – such as improved insulation – are economic today. In a perfectly efficient market, these mitigation policy options should already be ideally fully utilized and profitable even without a carbon price. While the recent rise in energy prices has led to an increase in uptake of these measures, as reported in The Observer on August 3, 2008, we are far from capturing the total potential savings represented by energy efficiency.
The fact that these methods are still not fully employed demonstrates that, for a variety of reasons (lack of information, short-term up-front costs and other behavioural factors), carbon prices may not be sufficient initially to promote adequate greenhouse gas mitigation in the real world. This leaves a role for energy efficiency standards and some incentives. At the other end of the curve, some technology solutions are currently very expensive and innovation theory suggests they should be incentivized directly.

Carbon pricing is only one part of the solution, and that the regulatory policies used in traditional regulation and innovation policy are both vital tools in the climate change toolkit. Carbon pricing is only one part of a strategy to tackle climate change. It must be complemented by measures to support the development of technologies, and to remove the barriers to behavioural change, particularly around take-up of energy efficiency.

Long-term optimal carbon price
Using carbon prices alone to incentivize the early development of emerging technologies – some of which could require carbon prices of nearly €100/ton to prompt inefficient, as such a high carbon price may put a disproportionate drag on the overall economy. This would also entail enormous transfer payments – potentially larger in scale than those that flow from the OECD to petroleum exporting countries today. The recipients of these payments would benefit from enormous windfall profits at very high carbon prices. And the poor may be hit harder than the rich, as carbon pricing is without compensating transfer, a regressive tax. This is unlikely to be politically or socially acceptable, unless it comes about gradually.

“Optimum” or even “acceptable” long-term carbon prices are therefore likely to be well below €100/ton, although during the process of establishing the trend, they may spike to high levels if the market does not move fast enough towards mitigation. Other regulatory instruments, such as R&D subsidies, can be used to drive innovation of what are currently more expensive opportunities such as CCS; this will allow government to buy promising technologies down the learning curve without subjecting the entire economy to very high carbon prices. The economy-wide costs of the subsidies and incentives associated with such a policy are likely to be much lower than the economic drag associated with a very high carbon price.

Therefore, climate change mitigation policy will need to include two distinct sets of regulation to compliment carbon pricing: Traditional regulation and innovation policy. These policy options will overcome market failures and prevent imposition of an initial carbon price so high that it could have negative consequences for the entire economy.

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I think we all know that we are living beyond our environmental means. We recently found out what happened when some of us lived [...]]]> small to medium business owners and managers struggle with limited time work out how to cut their costs and reduce all the various water that so easily happens in any business.

I think we all know that we are living beyond our environmental means. We recently found out what happened when some of us lived beyond our financial means and how it impacted on the whole world. We don’t want to learn the same lesson with the environment.

We are approaching limits to the rate we can continue to use oil and this will result in increasing costs and supply problems. There is still plentiful coal but the downside is the huge amounts of carbon dioxide released when it is used. The big problem with bio fuels is that so many of them use much needed food supplies or result in clearing even more tropical rain forest, resulting in less carbon dioxide absorption and animal extinctions. Biofuels from algae grown on sewage seems more sensible and sewage is not in short supply!

Lots of us are asking questions like:- – What is happening in the world? – Is global warming real? – How will my kids and grandkids cope as they grow up? – How can I reduce my spiralling costs of energy?

What is real is atmospheric pollution! Man’s activities have resulted in a layer of chemical pollution in the atmosphere that acts like an insulating blanket holding in heat. This is putting our children and grandchildren’s future at risk. We ignore this at THEIR peril.

The problem is that we cannot see this, so find it difficult to recognise the threat but it has been measured reliably. That is fact. Over the millennia there have been natural processes of heating and cooling resulting in very different sea levels but the greenhouse layer of pollution has added an additional heating factor.

We can expect much greater weather variability but a very severe winter is completely compatible with global warming, so is hotter, drier weather in countries like Australia and more intense storms. However these are weather not climate.

Now we are having carbon restrictions and emission trading around the developed world. And so we should!

BUT business is concerned about their rising cost plus the cost of complying with new carbon rules and carbon accounting. This is especially the case for the small end of town who are already under stress from global financial issues and just because they are small and already time poor. They are reluctant to take on anything else that is new, which is completely understandable.

It is possible to reduce waste and save significant amounts of money in businesses and this is really good news. The real problem is helping business to understand how easy it can be to just turn things off and waste less.

A great starting point is to go for a “grumpy” walk every day before going home and turn off everything that is not essential.

The popular step of getting a carbon audit done, then buying carbon offsets or paying some form of carbon tax seems wasteful until after you have reduced your energy use as much as possible first!

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In order to establish a [...]]]> In 2009, the global carbon market was approximately $136 billion. It is estimated that a global carbon market of $2 trillion can be established by 2020 if a legal binding global climate treaty is signed as well as a federal emission trading system is established in the US.

In order to establish a strong carbon market in the US, “cap and trade” scheme was introduced under which a carbon emission limit (cap) is set for companies, which when unable to achieve, can buy allowances from other companies. But, this system is facing opposition from Republicans in the U.S. Senate and doubts persist whether the bill related to this system will pass this year. However, other regulatory measures and “cap and refund” system are seen as alternatives to minimize greenhouse gas emissions.

The US carbon market was worth $2.7 billion in 2009; less than 3% of the total carbon permits traded under EU’s program, which equaled $93.9 billion in the same year. Majority of the carbon market in the US is derived through a 10-state cap and trade program in the northeast, known as the Regional Greenhouse Gas Initiative (RGGI) as well as offsets market, which accounted for $74 million in 2009.

This analysis was taken from a research paper published by GlobalData, follow this link to download the full Research Paper for free.Tweet

Everyday, more people and businesses are becoming aware of the impact of the carbon emissions caused by their everyday activities on the environment. Some people are aware and doing something about [...]]]> The new era of Emissions Awareness
The world’s leading scientists continue to stress the evidence supporting climate change grows stronger with new research.

Everyday, more people and businesses are becoming aware of the impact of the carbon emissions caused by their everyday activities on the environment. Some people are aware and doing something about it. But a lot of people think doing a little bit is enough. The truth is if you do a little you achieve a little. We need to make deep cuts in carbon emissions and help drive investment in low-carbon solutions.

But what can you do? An increasingly popular option is to offset carbon and become carbon neutral.

Offset Carbon and be Carbon Neutral
To carbon offset is to reduce or stop carbon emissions somewhere else in the world for some of the carbon emissions you are responsible in your daily life. If you offset carbon emissions equivalent to the carbon emissions of all your activities in one year, then you are carbon neutral.

You use a carbon credit to offset carbon emissions. A carbon credit generally represents one tonne of carbon emissions reduced in a carbon project somewhere else in the world.

However, there has been some concerns about the calibre of carbon credits available to offset carbon emissions.

Most carbon offset projects use carbon credits created from trees or renewable projects. While these sound attractive there are concerns about using them as carbon offsets. A third type of carbon credit, a carbon emissions credit from a compliance regulated scheme, overcomes these concerns and empowers you to proactively reduce global carbon emission credits. These alternatives are investigated in the article “What are the alternatives to carbon offset / become carbon neutral”.

A More Meaningful Solution – Carbon Emission Credits
Carbon emission credits work like this. Through a simple and powerful initiative, you access a compliance regulated market to buy and cancel carbon emission credits. Cancelling carbon emissions credits from the limited pool of credits in the European Emissions Trading Scheme means there are fewer credits available to be used by industry to emit carbon dioxide into the atmosphere. You are taking away the rights of industry to emit carbon dioxide.

Fewer carbon emission credits helps drive investment in low-carbon solutions such as energy efficiencies and renewable energy, as emitters can use the money from the carbon credits they sell to fund their investments in low-carbon solutions. They are rewarded for emitting less carbon dioxide.

Carbon emission credits have been referred to as the ‘most pure’ form of carbon emission reduction. We call it the Climakind alternative to offset carbon emissions because it helps ensure your carbon emissions reduction efforts are proactive, high quality and secure.

You help speed up the transition to a low-carbon future.

Making it Simple
To make it simple, Climakind provides affordable and easily recognisable levels of participation. You can choose to cancel carbon emission credits equal to one year of your annual carbon emissions and instantly become a Gold member, or start with one month’s carbon emissions as a Bronze member. You can add to your membership anytime through the member lounge at www.climakind.com. You can even compare your purchases to the global average over different time periods.

All this makes being Climakind (ClimateKind – to be climate kind is to be kind to the climate) more than just a simple carbon offset or carbon neutral solution.

You can make a difference
Whether you are a business or an individual Climakind can help you reduce carbon emissions.

Visit www.climakind.com and register to cancel carbon emission credits today.

Help make a difference. Act now to reduce global carbon emissions and encourage investment in low carbon-solutions.

You can have a meaningful impact in the transition to a sustainable future. You can make a difference.

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we have reached a point where most forms of energy are increasing [...]]]> Small to medium business is being squeezed hard by the global financial crisis at the same time as it is being asked to cut its carbon emissions. Their challenge is to realize that by going green and reducing waste they also save money.

we have reached a point where most forms of energy are increasing in cost and are in short supply.

We have polluted our atmosphere and we need to slow the rate of pollution down and governments around the world are setting up greenhouse gas emission restrictions.

Small to medium business needs to be able to reduce costs and also reduce their wastes and this includes energy, materials and human effort. Business also needs to do this without an extra time commitment. Or cash flow to make changes because business also has to cope with global financial chaos.

With all the problems that businesses faces at present, why do they need to add carbon trading and carbon reduction to the mix?

It is a fact that we have serious and increasing atmospheric pollution. This is man made and has been measured and this if the cause of climate change and global warming! This is measurable fact. We have changed the chemical composition of the atmosphere by pouring carbon dioxide, methane and other gases into the atmosphere for form an invisible (but measurable “doona” of pollution in our atmosphere holding heat in. This is unarguable and is putting our children and grandchildren’s future at risk. We ignore this at THEIR peril.

Around the world governments are bringing in Emission Trading Schemes and surveys show that most businesses have no idea what that will involve – it is yet another demand.

Businesses owners are increasingly caught in a juggling act trying to balance work, home, higher costs and now pressure ro reduce their carbon footprint and in many cases even start carbon accounting.

BUT reports show consumers increasingly patronise businesses that show they consider the impact of their business on the environment. This is a growing market segment and that is important in tough economic times.

All around the world people want to help the environment. In Australia this is over 90 % and surveys show more than 50% of us are even prepared to pay more for environmentally friendly products and services In fact most people (53% in UK, 63$ in the USA, 45% in China, believe that tackling climate change will benefit the economy

OK so it means we need to make some changes now but many of these will actually save money once we get our head around them and decide that these often minor changes are ok.

So many of the changes are surprisingly easy and painless!

Go for a “grumpy” walk around your business once or twice every day and turn off things that are not being used and make a list of other ways you can save energy and reduce waste.

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Read more on BusinessWeek
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“The Global Carbon Trading Market – Concepts, Regulations and Industry Trends to 2020” provides an in-depth analysis on the global carbon trading market. The report provides the latest information on the value, volume and price of the emissions traded in primary project-based mechanisms such as Clean Development Mechanism (CDM), [...]]]> Summary

“The Global Carbon Trading Market – Concepts, Regulations and Industry Trends to 2020” provides an in-depth analysis on the global carbon trading market. The report provides the latest information on the value, volume and price of the emissions traded in primary project-based mechanisms such as Clean Development Mechanism (CDM), Joint Implementation (JI) and secondary CDM, and allowance markets such as the EU Emission Trading System (ETS), New South Wales Exchange, Chicago Climate Exchange, the Regional Greenhouse Gas Initiative (RGGI) and Assigned Amount Units (AAUs). The report provides a scenario-based forecast of the carbon market up to 2020. The report provides an overview on various carbon registries, carbon exchanges and the major companies participating in the carbon trade. The research work provides indispensable assessment of risk and opportunities for the corporate in the carbon constraint environment. Regulatory efforts to mitigate climate change have spawned an emerging carbon market that grew at compound annual growth rate (CAGR) of 89% to reach $138.3 billion in 2009. The EU’s initiatives to build a broad, globally linked carbon market, the prospective US Federal cap-and-trade program and the strong emergence of other regional market trading mechanisms will drive the carbon market significantly beyond 2012.

Scope

– Key market data on the volume and market value of carbon allowances, covering both project-based transactions and allowance-based transactions from 2004–2009.
– Analysis on all global carbon market exchanges — the EU Emission Trading System (ETS), New South Wales Exchange, Chicago Climate Exchange, the Regional Greenhouse Gas Initiative (RGGI), Australian Climate Exchange, World Green Exchange etc.
– Historic pricing trends for carbon in various exchanges and project-based transactions from 2005–2009.
– Forecasts of the global carbon trading market up to 2020 based on likely scenarios that might emerge in the future.
– Impact assessment of key carbon regulations and policies and their impact on the growth of global carbon trading market.
– Analyzes market-based instruments such as certifications and standards used in carbon trading in 2009.
– Overview on investment firms, infrastructure and energy service providers, advisory companies, financial firms, brokerage firms, carbon solution providers and other auditing firms participating in carbon trade.
– Key emission trading companies covered include 3 Degrees Incorporated, APX Incorporated, Baker & McKenzie, Blue Source, CantorCO2e, Climate Focus and Credit Suisse
– Assessment of risk and opportunities for the corporate in the carbon constraint environment

Reasons to buy

– Navigate the carbon emission market landscape through detailed analysis of the current carbon market dynamics and potential changes
– Identify the most promising geography to invest in energy efficiency and renewable energy projects, in order to minimize carbon taxes.
– Identify the most promising geography to invest in the unconventional and renewable energy sectors to minimize carbon taxes.
– Develop custom strategies for different geographies based on the stringency of the carbon policy in the respective geography.
– Develop business strategies with the help of specific insights into policy decisions being taken on the carbon credits trade by EU 27, the US, Australia and other developed and emerging countries worldwide.
– Identify risks associated with tightening carbon emission cap and transform them into opportunities for future growth.”

Companies Mentioned

3 Degrees Incorporated
APX Incorporated
Baker & McKenzie
Blue Source
CantorCO2e
Climate Focus
Credit Suisse
EcoSecurities Group
Equator LLC
MGM International
Natsource
RNK Capital LLC
Sterling Planet, Incorporated
Tradition Financial Services/TFS Energy/TFS Green
TUV SUD America

To know more about this report & to buy a copy please visit :
http://www.visionshopsters.com/product/3200/The-Global-Carbon-Trading-Market-Concepts-Regulations-and-Industry-Trends-to-2020.html

Contact us:

Visionshopsters
Ph : 91-22-40583020
Emailid: marketing@visionshopsters.com
Website : www.visionshopsters.com

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Firms are set quotas on how much carbon dioxide they can produce per year, if they produce more than [...]]]> There is an emissions trading scheme in operation internationally but many people aren’t aware that this is perceived to be the cornerstone of the climate change policy in the EU and USA.

Firms are set quotas on how much carbon dioxide they can produce per year, if they produce more than this allowance, then they buy an allowance from another firm that has not reached it’s quota on how much it can produce in one year! Get it?

Emissions Trading is particularly suited to the emissions of greenhouse gases, the gases responsible for global warming, which have the same effect wherever they are emitted.

Emissions of carbon dioxide – a greenhouse gas – are widely thought to be a key factor in global warming, and increasing atmospheric temperatures around the world.

The idea of the carbon-trading scheme was to raise the cost to firms of continuing to pollute while creating a market to give an incentive to become more environmentally efficient. They are traded in a similar way to buying and selling shares, there are a number of companies that offer the buying and selling of carbon units and many offer different commissions and even free trading if you shop around. I even saw one firm that offered a one stop shopping for Renewable Energy, Biodiversity, and Greenhouse Gas. Its like an online retailer but for things you can’t touch. Ill have 2 pounds of apples, a bag of potatoes and a Biodiversity credit please!!!

On an international level countries are able to deal in carbon trading The potential benefits of such a system for developing countries would be that poorer, developing countries can sell there surplus carbon dioxide to richer countries. This income could stimulate much needed economic growth. They could also achieve their Kyoto commitments at the lowest possible cost as the money needed to invest in cleaner technology can be funded by the trading on carbon units. Countries like the USA and UK could pay the countries in Africa to REFOREST there lands, this reduction in carbon dioxide in the planet would then allow USA/UK firms to emit extra carbon dioxide into the atmosphere. It would probably be cheaper to REFOREST parts of Africa than to buy state of the art cleaner technology for firms in the West. How many trees could you plant for a million dollars/pounds in Africa?

The cost of cleaner technology in the West obviously varies from industry to industry, size of the company, technological advances available etc but surely a company would not trade CO2 unless we were talking big money and big business. Carbon trading sounds a bit strange to me, as you are trading air, but if this leads to more trees being planted and a reduction in climate change – Im all for it!Tweet