The Azimuth Project
Carbon trading (Rev #4, changes)

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Carbon trading is a form of emissions trading that specifically targets carbon dioxide. This form of permit trading is used by some countries utilize in order to meet their obligations specified by the Kyoto Protocol?, namely, the reduction of carbon emissions. There are also sub-national entities engaged in carbon trading.


It has been introduced in several EU-countries and here is a review by Gilbertson and Reyes of how it has worked sofar:

Carbon trading lies at the centre of global climate policy and is projected to become one of the world’s largest commodities markets, yet it has a disastrous track record since its adoption as part of the Kyoto Protocol. Carbon Trading: how it works and why it fails outlines the limitations of an approach to tackling climate change which redefines the problem to fit the assumptions of neoliberal economics. It demonstrates that the EU Emissions Trading Scheme, the world’s largest carbon market, has consistently failed to ´cap´ emissions, while the UN’s Clean Development Mechanism (CDM) routinely favours environmentally ineffective and socially unjust projects. This is illustrated with case studies of CDM projects in Brazil, Indonesia, India and Thailand.

UN climate talks in Copenhagen are discussing ways to expand the trading experiment, but the evidence suggests it should be abandoned. From subsidy shifting to regulation, there is a plethora of ways forward without carbon trading – but there are no short cuts around situated local knowledge and political organising if climate change is to be addressed in a just and fair manner.




On Thursday December 16th, 2010, California’s Air Resources Board began a cap and trade system for carbon. This system will implement the state’s law mandating that carbon emissions be reduced back to 1990 levels by 2020. This will amount to a 15% decrease from current emissions.

The system will let greenhouse gas emitters buy and sell emission allowances. It covers everyone who emits more than 5,000 tons of carbon dioxide per year. That’s about 360 businesses, who taken together emit about 85% of the CO2.

At first these business will receive free allowances that cover most of their emissions, but as time passes, they’ll have to buy those allowances through quarterly auctions. According to the plan, there will be two phases. By 2012, all major industrial sources and utilities will be covered. By 2015, distributors of fuels and natural gas will also be included.

The chair of the Air Resources Board, Mary Nichols, gave a speech. Among other things, she said:

This program is the capstone of our climate policy, and will accelerate California's progress toward a clean energy economy. It rewards efficiency and provides companies with the greatest flexibility to find innovative solutions that drive green jobs, clean our environment, increase our energy security and ensure that California stands ready to compete in the booming global market for clean and renewable energy.

Western Climate Initiative

California is not alone in its plan to institute carbon trading. By the time the program gets rolling in 2012, California plans to have built a framework for carbon trading with New Mexico, British Columbia, Ontario and Quebec — some of its partners in the Western Climate Initiative:

The green states and provinces are the ‘partners’; the blue ones are the ‘observers’.

Regional Greenhouse Gas Initiative

Furthermore, ten states of the U.S. — New York, New Jersey, Delaware, Maryland and the New England states — have started up another system, the Regional Greenhouse Gas Initiative, which covers only electric utilities. They are already doing auctions.


category: carbon, organizations