In economics, carbon trading is a form of emissions trading that allows a country to meet its carbon dioxide emissions reduction commitments, often to meet Kyoto Treaty requirements, in as low a cost as possible by utilising the free market. It is a means of privatising the public cost or societal cost of pollution by carbon dioxide. Economics (deriving from the Greek words οίκω [okos], house, and νέμω [nemo], rules hence household management) is the social science that studies the allocation of scarce resources to satisfy unlimited wants. ... Emissions trading is an administrative approach used to reduce air pollution by providing economic incentives for reducing net emissions. ... Carbon dioxide is an atmospheric gas composed of one carbon and two oxygen atoms. ... Earth as seen by Apollo 17 The Kyoto Protocol is an amendment to the United Nations Framework Convention on Climate Change (UNFCCC), an international treaty on global warming. ... A free market is an idealized market, where all economic decisions and actions by individuals regarding transfer of money, goods, and services are voluntary, and are therefore devoid of coercion and theft (some definitions of coercion are inclusive of theft). Colloquially and loosely, a free market economy is an economy... Pollution is the release of harmful environmental contaminants, or the substances so released. ...

Operation

A country (or group of countries) caps its carbon emissions at a certain level (this is known as cap and trade) and then issue permits to firms and industries that grant the firm the right to emit a stated amount of carbon dioxide over a time period. Firms are then free to trade these credits in a free market. Firms whose emissions exceed the amount of credits they posses will be heavily penalised. The idea behind carbon trading is that firms that can reduce their emissions at a low cost will do so and then sell their credits on to firms that are unable to easily reduce emissions. A shortage of credits will drive up the price of credits and make it more profitable for firms to engage in carbon reduction. In this way the desired carbon reductions are met at the lowest cost possible to society. Emissions trading is a proposed economic solution to air pollution. ...

Current carbon trading schemes

The European Union Greenhouse Gas Emission Trading Scheme (EU ETS) is the largest multi-national, greenhouse gas emissions trading scheme in the world. It commenced operation in January 2005 and all 25-member states of the European Union participate in the scheme.

The Regional Greenhouse Gas Initiative is a proposed carbon trading scheme being created by nine by North-eastern and Mid-Atlantic American states; Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. The scheme was due to be developed by April 2005 but has not yet been completed. State nickname: The Constitution State Other U.S. States Capital Hartford Largest city Bridgeport Governor M. Jodi Rell Official languages English Area 14,371 km² (48th)  - Land 12,559 km²  - Water 1,809 km² (12. ... State nickname: The First State Other U.S. States Capital Dover Largest city Wilmington Governor Ruth Ann Minner Official languages None Area 6,452 km² (49th)  - Land 5,068 km²  - Water 1,387 km² (21. ... State nickname: The Pine Tree State Other U.S. States Capital Augusta Largest city Portland Governor John Baldacci Official languages None Area 86,542 km² (39th)  - Land 80,005 km²  - Water 11,724 km² (13. ... State nickname: Bay State Other U.S. States Capital Boston Largest city Boston Governor Mitt Romney Official languages English Area 27,360 km² (44th)  - Land 20,317 km²  - Water 7,043 km² (25. ... State nickname: The Granite State Other U.S. States Capital Concord Largest city Manchester Governor John Lynch Official languages English Area 24,239 km² (46th)  - Land 23,249 km²  - Water 814 km² (3. ... State nickname: The Garden State Other U.S. States Capital Trenton Largest city Newark Governor Richard Codey (acting) Official languages None defined Area 22,608 km² (47th)  - Land 19,231 km²  - Water 3,378 km² (14. ... State nickname: Empire State Other U.S. States Capital Albany Largest city New York Governor George Pataki Official languages None Area 141,205 km² (27th)  - Land 122,409 km²  - Water 18,795 km² (13. ... State nickname: The Ocean State, Little Rhody Other U.S. States Capital Providence Largest city Providence Governor Donald Carcieri Official languages None Area 4,005 km² (50th)  - Land 2,709 km²  - Water 1,296 km² (32. ... State nickname: The Green Mountain State Other U.S. States Capital Montpelier Largest city Burlington Governor Jim Douglas Official languages None Area 24,923 km² (45th)  - Land 23,974 km²  - Water 949 km² (3. ...

External links

• http://penoy.admu.edu.ph/carbontrading
• The Regional Greenhouse Gas Initiative
• The European Union Greenhouse Gas Emission Trading Scheme
• A Guide to The European Union Greenhouse Gas Emission Trading Scheme
• The Carbon Trust
• Ecolytics: A Greenhouse Gas Emissions Management System

References

• Johnson, E. & Heinen, R. (2004, April). Carbon trading: time for industry involvement. In Environment international, 30, 279 – 288.