Climate Change (cont.)
The problem associated with greenhouse gases is
thought to be one of accumulation. Greenhouse gas
emissions contribute to climate change regardless of where
the emissions occur, and climate change can be addressed
by reductions in greenhouse gas emissions no matter
where they occur. This suggests that emissions trading
could be a useful tool in addressing climate change.
A series of reports by the United Nations outlining concerns about climate change compelled world leaders to action. International momentum led to a global summit in Rio de Janeiro, Brazil in 1992. The participating nations signed several documents including the United Nations Framework Convention on Climate Change, in which over 180 nations committed to an objective of preventing dangerous interference in the world's climate system.
The Framework Convention guided several
additional international meetings in the succeeding years,
and these discussions resulted in the Kyoto
Protocol. Adopted in 1997, the Kyoto Protocol would commit
38 industrialized countries to reduce greenhouse gases
an average of 5.2% from 1990 levels over the
period between 2008 and 2012. The Protocol has not yet
been brought before the US Senate for ratification.
The Kyoto Protocol has provisions for emissions trading as a mechanism under the agreement. Emissions trading would allow the marketplace to identify the lowest-cost reduction options.
Key questions remain, not the least of which is who would be allowed to trade, what they would trade, and how it would be traded. Nonetheless, countries and private entities are beginning to explore the viability of greenhouse gas emissions trading. A handful of trades have already been executed, and most market participants expect trading to ramp up once the future of international markets is made more clear.
For more information check these Web addresses:
http://www.epa.gov/ttn/
http://www.epa.gov/globalwarming/
http://www.unfccc.de