Energy taxation Differential taxation Emissions trading system ru o

A cap and trade system can cause serious risks to international trade.

Estimates show that emission trading systems can reduce the cost of cutting greenhouse gas emissions by as much as 75 .

Worse still, cap and trade systems in practice do not rely solely on auctions to distribute the emissions permits.

But a carbon tax is far more transparent and potentially less prone to the pitfalls seen in international carbon quota trading.

Will Cap and Trade Incite Protectionism?

Introducing sectoral emissions trading

The United Nations Secretary General says that it may be difficult for President Obama to come with strong authority to reach agreement in Copenhagen.

Many blame the United States, which will not have cap and trade legislation in place before Copenhagen.

It is thus not surprising that Europe could enact a cap and trade system that imposes a carbon price on a large part of its industry.

If the government sells these permits in an auction, the price of the permit would be a cost to the firm in the same way as a carbon tax and with the same resulting increases in consumer prices. The cap and trade system thus imposes a carbon tax without having to admit that it is really a tax.

The cap and trade system thus imposes a carbon tax without having to admit that it is really a tax.

Even if every country has a cap and trade system and all aim at the same relative reduction in national CO2 emissions, the resulting permit prices will differ because of national differences in initial CO2 levels and in domestic production characteristics. Because the price of the CO2 permits in a country is reflected in the prices of its products, the cap and trade system affects its international competitiveness.

Because the price of the CO2 permits in a country is reflected in the prices of its products, the cap and trade system affects its international competitiveness.

The European Union ETS is the main marketplace.

But before rushing to impose tariffs, it is important to remember that cap and trade policies would not be the only government source of differences in competitiveness.

Another option is to introduce sector wide, company level emissions trading in industrial sectors in developing countries where the capacity exists to monitor emissions and ensure compliance.

Given that the Kyoto Protocol provides for emissions trading, in order to implement its commitments Belarus would be able to sell a part of its emissions credits.

And there are a lot of devils in the details of the cap and trade proposals on the table.

Governments have therefore focused on a cap and trade system as a way of increasing the cost of CO2 intensive products without explicitly imposing a tax.

No one attempts to use tariffs to balance those government created differences in competitiveness, and there should be no such attempts if a cap and trade system is introduced.

CAMBRIDGE There is a serious danger that the international adoption of cap and trade legislation to limit carbon dioxide emissions will trigger a new round of protectionist measures. While aimed at reducing long term environmental damage, cap and trade policies could produce significant harmful economic effects in the near term that would continue into the future.

An alternative mechanism under the Kyoto protocol is emissions trading of so called Assign Amount Units (AAU).

CAMBRIDGE There is a serious danger that the international adoption of cap and trade legislation to limit carbon dioxide emissions will trigger a new round of protectionist measures.

Energy debates in the US, Australia, and other countries have centered so far on introducing a cumbersome cap and trade permit system.

Eventually, a worldwide carbon trading system could generate much of the money needed to finance a global conservation network.

Well, these Cap and Trade guys are saying that a new carbon stock market is the best way to get it done.

At the core of California s efforts to reduce greenhouse gas emissions is the state s cap and trade program.

In a cap and trade system, the government sets total allowable national emissions of CO2 per year and requires any firm that causes CO2 emissions to have a permit per ton of CO2 emitted.

Armenia ratiied the Kyoto Protocol with a reservation for A nnex I and therefore does not participate in the mechanism of emissions trading. However Armenia participates in the Kyoto Protocol Clean Development Mechanism.

Since 2005, when the European Union introduced its Emissions Trading System, German industry has achieved massive gains in market share, despite energy prices having risen much faster than in the US and elsewhere.

Unfortunately, cap and trade systems are difficult to manage and don t give clear signals about the future price of permits.

UNCTAD work on climate change began in 1999 with its Emissions Trading Programme.

While the regulatory mechanisms of both Kyoto and the European Trading Scheme have contributed to the establishment of an emerging market for carbon trading, interested parties are now concerned about the immediate future.

In a related development, the European Union Greenhouse Gas Emission Trading Scheme goes into effect on 1 January 2005.

In fact, the leading solution, known as cap and trade or emissions trading is actually a huge problem.

So how does cap and trade work?

But in Europe there is another option for raising revenues the European Union Emission Trading Scheme (ETS).

The evolving experiences with carbon finance and emissions trading also show promising results that can provide strong incentives for renewable energy and energy efficiency market development.

This is one of the arguments in favour of a hybrid instrument, that has a price floor, i.e., a minimum permit price, and a price ceiling, i.e., a limit on the permit price.

Whatever the outcome as regards the third objective, the way the project has been set up optimizes the potential for disbursing the fund under good conditions, and thus its durability.

Instead, a U.S. cap and trade law proposed in 2009 guts the Clean Air Act, leaving it to the market to fix the problem.

Some of my friends who really care about our future support cap and trade.

CO2 Emissions.

Anthropogenic emissions