Talk:Emissions trading

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The article states that under the Kyoto Protocol countries such as China and India would profit from the sale of emissions credits -- this isn't accurate since credits aren't given to developing countries under Kyoto because those countries aren't required to reduce their emissions.

Much good info on emission trading under Kyoto: http://unfccc.int/kyoto_mechanisms/emissions_trading/items/2731.php Thinksinpictures 07:14, 25 Feb 2005 (UTC)

- But they can profit (at the United States' expense) through the protocol's CDM (Clean Development Mechanism). 68.164.87.228 01:12, 5 October 2005 (UTC)

Contents 1 false claims 2 Harmful to business 3 any 'revenue neutral' approach, will fail 4 pros/cons of enforcement regimes 5 allocation of permits 6 Questions 7 Possible answer

[edit] false claims

It is not true that emissions trading "doesn't harm industrial concerns", unless we are comparing emissions trading to traditional regulation. When we impose a pollution cap, we induce firms to undertake costly emissions-reducing procedures. No free lunches. Neither is it true that environmental groups can hoard credits without imposing the same sort of cost, for hoarding credits is just a way to lower the emissions cap.

[edit] Harmful to business

Emission trading schemes are a disaster to small businesses, and the rule of law. They force businesses to compete to buy 'pollution permits', with the obvious results that only the largest businesses can obtain these permits. Furthermore, emission trading essentially allows companies to exempt themselves from pollution laws if they pay can afford to pay a certain fee.

No fair trading

Developing countries have for sure way less money to be spent in reducing gases emissions:only rich countries will be able to successfully stay below the set limits and "sell" emission credits to others. Money can buy extra freedom in not following the rules...once again...am i wrong?

You're absolutely wrong. The entire purpose of emissions trading is to transfer money from productive (ie rich) countries to unproductive (ie poor) countries. Imagine a situation in which Mr. X drives his car 50 miles to work every day, but Mr. Y is unemployed. Mr. Y could then accuse Mr. X of destroying the environment by driving his car. But the oh-so righteous (but poor) Mr Y could "trade" him some emissions credits, for a price. Same exact thing. Countries like Ghana/Sudan/Bolivia/Afghanistan, which have few factories, will receive redistributions of cash from countries like the US and Japan. User:141.151.160.231

Any 'transfer' of resources is incidental, not the purpose. The purpose of emission trading, generally, is simply to reduce emissions as cheaply as possible. The CDM as you may allude to, has as one of its purposes to transfer technology to developing countries, but that's a special case of emissions trading. Jens Nielsen 14:50, 30 April 2006 (UTC)

Eh. Read the article. It's just the spectre of communism with a new reason to live.—The preceding unsigned comment was added by 70.20.122.160 (talk • contribs) .

[edit] any 'revenue neutral' approach, will fail

the current European system is bumbleing along, because nobody is being pinched, every company has enough credits. as soon as somebody has to pay,the arbitrary giveaway system will fail. The only system that will work, will be an auction system, with the aoction price being much like a tax. The tax will hit electrical production, especially harrd. The tax, will become a political issue.--CorvetteZ51 10:45, 5 August 2006 (UTC)

[edit] pros/cons of enforcement regimes

I find this description of the relative merits of centralized v. 3rd party enforcement regimes very unhelpful. I can't see why all of the objections to centralized enforcement wouldn't be applicable to third party audits (why are third party audits cheaper than having the government do it directly? surely somebody has to pay? why are 3rd party auditors incorruptible but government auditors aren't?) but the paragraph seems to strongly imply that 3rd party auditing is superior. Am I reading this wrong or do other people have the same objection?

I agree with you. The enforcement section should simply indicate that enforcement is critical and that transparency is important. References should be provided for any statement that is stronger than that. Who's going to do the rewrite?

people are missing the point of the merits of 1st v. 3rd party enforcement, the point is, with third party, the gov't hires less people, so it looks like the costs of the progran is less. Of course, the 'third party employees' don't work for nothing, so they charge industry for their expenses.Ie, an additional burden on industry.CorvetteZ51 05:37, 12 November 2006 (UTC)

[edit] allocation of permits

the needs to be more discussion on how permits get allocated. Keep in mind that giving away permits, is the same as giving away money. In the EU ETS, enough permits are being given away, so nobody has to cut back on carbon.CorvetteZ51 05:45, 12 November 2006 (UTC)

Certainly the markets are providing a 'soft landing,' but 2006 credits are trading for over 10 Euros and 2008 credits, when the market begins to have more bite, for over 15. Compare that to a market where there really is no obligation, the Chicago Climate Exchange, where credits are selling for $4. RichWoodward 13:23, 17 November 2006 (UTC)

credits trading at 6.5 euros, as od 21Dec-2006.CorvetteZ51 12:52, 21 December 2006 (UTC)

credits trading at 4.70 Euros, 5-Jan-07, there is no logical way to give credits away. CorvetteZ51 10:26, 6 January 2007 (UTC)

The existence of trading, does not imply the soundness of the underlying activity. With that said, is there a way to find out who gets permits? Is the system transparent for outsiders, or is it some kimd of secret deal?CorvetteZ51

I don't know how transparent the trading is. Market credibility could be aided by transparency, but it's not the only way to ensure that. If there is sufficient government oversight, then the market will trade real obligations. You suggest above that there's excess supply. But if that were the case the price would be zero -- who would pay for these credits if there's an a abundance of them? RichWoodward 13:58, 15 December 2006 (UTC)

is anybody stupid enough to think, that this scam will work? C'mon folks, some 'minister' decides how much money he gives yoor company? WTF, the scam only -->appears<-- to be working, because enough credits are given away, so that nobody needs to do anything. 207.53.228.192 02:52, 13 November 2006 (UTC)

[edit] Questions

Maybe it's my fault - but some one part of this article seems confusing - and I'd really appreciate any clarification. So when you buy credits does that perminately raise your cap? If that is true it seems kind of unfair, as your technically are passing your original cap each year, but you only had to pay that one fine years ago... again really appreciate any helpDaniel()Folsom ^T|_C|^U 01:10, 1 February 2007 (UTC)

Hey Daniel, Although not an expert I added a simplified explanation of the whole concept under Talk:Carbon_credit check it out, hope it helps. --Evolve2k 12:18, 21 February 2007 (UTC)

[edit] Possible answer

Yes, when a company buys credits they in essence are increasing their right to pollute. The caps usually are adjusted each year so that a credit purchase only covers a single year or some other limited time frame. Users with surplus credits -- they don't need to pollute as much as allowed -- can either sell the credits or donate them to a nonprofit organization that will "retire" them or remove them from the market. The company can get a tax deduction because the credit has value. ChrisCarsonThompson 31 January 2007 (UTC)

Oh I think I see, so the cap remains the same, it's just like you have to pay a tax on your overproduction. Thank you!--Daniel()Folsom ^T|_C|^U 03:44, 2 February 2007 (UTC)

This is also how some carbon offset providers work; they pool donors' contributions / customer payments (depending on whether they're non-profit or for-profit), purchase REC's or similar instruments, and retire those instruments. This effectively lowers the cap, and makes credits more scarce (read: more expensive). Individuals could do this themselves, but a seat on the Chicago Climate Exchange is out of the average citizen's price range. A good offset provider does some research into whose credits they're buying, rather than just blindly buying the cheapest offsets out there. But that's another article. -- A. 03:40, 19 March 2007 (UTC)