December 3, 2011 / 12:28 PM / in 7 years

FACTBOX-Carbon trading schemes around the world

Dec 3 (Reuters) - Companies and governments around the
world are turning to emissions trading as a weapon to fight
climate change and join a global carbon market worth $142
billion last year.	
    Under cap-and-trade schemes, companies or countries face a
carbon limit. If they exceed the limit they can buy allowances
from others. They can also buy carbon offsets from outside
projects which avoid greenhouse gas emissions, often from
developing countries.	
    Following is a list of established and emerging schemes:	
    ESTABLISHED SCHEMES:	
    1. Kyoto Protocol: Mandatory for 37 developed nations,
excluding the United States which never ratified the pact.	
    Launched: 2005	
    Covers: All six main greenhouse gases.	
    Target: Five percent average cut in 1990 emissions in
2008-2012 first phase.	
    How it works: Rich countries cut greenhouse gases at home or
buy emissions rights from one other -- if one country stays
within its target it can sell the difference to another emitting
too much. Or they can buy carbon offsets from projects in
developing countries under Kyoto's clean development mechanism.	
    The present round of the Kyoto Protocol expires in 2012 and
the future of the scheme after that date is still uncertain as
U.N. climate talks flounder.	
    2. European Union Emissions Trading Scheme:	
    Launched: 2005	
    Covers: Nearly half of all EU carbon emissions. Mandatory
for all 27 EU members, plus Iceland, Liechtenstein and Norway.	
    Target: 21 percent cut below 2005 levels by 2020	
    How it works: Member states allocate a quota of carbon
emissions allowances to 11,000 industrial installations.
Companies get most permits free now but many electricity
generators will have to pay for all these from 2013.	
    More than 3,000 airline operators will join the scheme in
2012. Companies can buy a limited number of U.N.-backed carbon
emission offsets if that works out cheaper than cutting their
own emissions.	
    3. New Zealand emissions trading scheme:	
    Launched: July 1, 2010. Mandatory.	
    Covers: Forestry started first. Electricity, industrial
process emissions and transport pollution were included from
July. Waste to start in 2013. Agriculture to start 2015.	
    Target: The government has pledged to cut greenhouse gas
emissions between 10 and 20 percent by 2020 on 1990 levels.	
    How it works: Emissions units are allocated based on an
average of production across each industry. From July 1, 2010,
to Jan. 1, 2013, emitters have the option of paying a fixed
price of NZ$25 per tonne of carbon, and will only have to
surrender 1 unit for every 2 units of emissions. Such assistance
will be gradually phased out.	
    4. Northeast U.S. states' Regional Greenhouse Gas Initiative
(RGGI):	
    Launched: January 2009	
    Covers: carbon from power plants in 10 northeast states. New
Jersey to withdraw by end of year. Allows offsets from five
different types of clean energy projects including capturing
methane from landfills and livestock manure, but only if a $7
per ton price trigger is hit.	
    Target: 10 percent cut below 2009 levels by 2018.	
    5. Japan: Tokyo metropolitan trading scheme:	
    Launched: April 2010	
    Covers: Around 1,400 top emitters.	
    Target: Japan aims to cut emissions by 25 percent by 2020
from 1990 levels. Government hopes to pass a climate bill which
includes a national trading scheme have faded after the
Fukushima nuclear accident took precedence.	
    How it works: Tokyo city sets emissions limits for large
factories and offices to meet by using technology like solar
panels and advanced fuel-saving devices.	
    Japan is also pushing ahead with a bilateral offsets scheme
by backing CO2 reduction projects in developing nations.	
    	
    EMERGING SCHEMES:	
    1. Australia: Clean Energy Bill	
    On Nov. 8, parliament adopted what could be the largest
emissions trading scheme outside of Europe after more than a
decade of trying.	
    Covers: Australia's carbon pollution apart from exempted
agricultural and land sectors, and the combustion of biomass,
biofuels and biogas.	
    Target: National aim to cut greenhouse gases by 5 percent
below 2000 levels by 2020.	
    How it works: 500 companies will pay a A$23 per tonne carbon
tax from next July, rising by around 5 percent a year, moving to
a market-based trading scheme in 2015. This is subject to a
three-year price ceiling of A$20 above international prices for
2015-2016, rising by 5 percent in next two years. There will be
a price floor of A$15, rising by 4 percent per year.	
    2. Californian climate change law "AB 32":	
    Launch: Delayed by a year to 2013.	
    Covers: Economy-wide emissions, from power plants,
manufacturing and, in 2015, transportation fuels.	
    Target: Cut the state's emissions to 1990 levels by 2020.	
    How it works: Would give away most of its credits to
polluters in the early years of the plan. Allows emitters to use
offsets to fulfill up to 8 percent of their compliance
obligation.	
    3. Western Climate Initiative (WCI)	
    Launch: January 2013.	
    Covers: California, Canada's British Columbia and Quebec.
Ontario also expected to join.	
    Target: Cut emissions 15 pct below 2005 levels by 2020.	
    How it works: Emitters such as power plants would have to
buy offsets to cover their emissions. Transport would be
included in 2015.	
    5. South Korea emissions trading scheme:	
    Launch: Expected to start in 2015.	
    Covers: About 470 companies that emit more than 25,000
tonnes of carbon dioxide annually and are collectively
responsible for 60 percent of the country's emissions. All
sectors to be covered.	
    The government wants the bill to be passed before the end of
the year and to start the scheme from 2015. It bowed to industry
pressure by increasing free carbon permits and softening penalty
rules for non-compliance in a bid to get parliamentary approval.	
    Target: Government has set a 2020 emissions reduction target
of 30 percent below forecast "business as usual" levels.	
    6. Taiwan carbon offset scheme	
    Launch: Unknown	
    Covers: Nearly 270 companies responsible for more than half
of Taiwan's greenhouse gas pollution have agreed to supply
emissions data to the government to help it launch a carbon
offset scheme.  	
    Target: Taiwan aims to cut CO2 to 2005 levels by 2020.	
Legislation to limit emissions has struggled to get through
parliament since the government introduced a bill in 2008.	
    7. India: Perform, Achieve and Trade system:	
    Launch: Trading is set to begin in 2014 after a three-year
rollout period.	
    Covers: A mandatory energy efficiency trading scheme
covering eight sectors responsible for 54 percent of India's
industrial energy consumption.	
    Target: India has pledged a 20-25 percent reduction in
emissions intensity from 2005 levels by 2020.	
    How will it work? Annual efficiency targets will be
allocated to firms. Tradeable energy-saving permits called
Escerts will be issued depending on the amount of energy saved
during a target year.	
    8. China: Pilot carbon trading schemes in seven provinces
and cities - Beijing, Chongqing, Guangdong, Hunan, Shanghai,
Shenzhen and Tianjin:	
    Launch: The pilot schemes can start as early as 2013. They
will cover energy production and various energy-intensive
industries. Government officials have said 2015 could be the
starting date for a national scheme, although a final timetable
has not been agreed.	
    Target: China has pledged to cut the carbon intensity of its
economy 40-45 percent below 2005 levels by 2020.	
 (Sources: Reuters, Point Carbon)
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