Emissions Trading Systems Put a Price on Carbon Emissions
Reuters reported that an Emissions Trading System sets a gradually decreasing cap on the emissions a sector or group of sectors can produce. It creates Carbon Permits for those emissions, which companies must buy for each tonne of CO2 they emit. Some sectors are given free permits to help maintain international competitiveness.
Below are some of the major carbon emissions trading systems around the world
BRITAIN - Britain launched a domestic ETS in 2021 after leaving the European Union scheme following Brexit. It covers power plants, aviation and energy intensive industries.
CHINA - A national ETS covering the power sector is set to launch this month. Already covering 4 billion tonnes of carbon emissions, or around 40% of China’s total, it is expected to expand to other carbon-intensive sectors, including steel and construction, in the next phase.
EUROPEAN UNION - The EU’s ETS, which started 16 years ago, is mandatory for all 27 EU members, plus Iceland, Liechtenstein and Norway, covering power plants, aviation and energy intensive industries. The European Commission has also proposed that it be expanded to include shipping.
KAZAKHSTAN - Its scheme started in 2013. It was suspended in 2016 and relaunched in 2018 following reforms. It covers the energy sector, mining and chemical industries.
MEXICO -A three-year pilot scheme was launched in 2020 covering the power, oil and gas, and industrial sectors.
NEW ZEALAND - Its ETS, which began in 2008, covers electricity generators, manufacturers of liquid fossil fuels including petrol and diesel. Some forest owners are given free permits others can voluntarily join the scheme.
QUEBEC - Its scheme was launched in 2012 and covers electricity and energy intensive industrials.
SOUTH KOREA -Its ETS started in 2015. It covers about 600 of the biggest emitters, collectively responsible for almost 70% of the country’s annual emissions.
UNITED STATES - The United States does not have a national ETS, but many regions and states use carbon pricing, such as California and states covered by the Regional Greenhouse Gas Initiative: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.