Emissions Trading

What is it?

Emissions Trading

a Government initiative to address climate change via a scheme to reduce greenhouse gas emissions

Climate Change and the Greenhouse Effect

http://www.britain4kiwikids.org.nz/news/images/globalw2.jpg

MainGreenhouseGases:• Carbon Dioxide• Methane• Nitrous Oxide

Emission; A substance discharged into the air

How are excessive levels of greenhouse gas pollutants released

into the atmosphere?

Human activity is changing the atmosphere by generating pollutant emissions; what are

some of them?

http://www.blueman.com/land/archive/earth/

Global anthropogenic greenhouse gas emissions broken down into 8 different sectors for the year 2000.

http://www.answers.com/greenhouse%20gas

Emissions Trading; How does it work?

• Targets companies that produce 25,000 tonnes or more of greenhouse gas emissions per year = 1,000 companies.

In Australia, the Government is currently preparing to implement an emissions trading scheme; “Carbon

Pollution Reduction Scheme”

• ‘PAY TO PULLUTE’

• giving incentive to reduce emissions

• Invest in environmentally friendly energy technologies

• Total emissions allowed to emit each year is called a ‘cap’.

http://www.youtube.com/watch?v=nJZTFiBCM2Y

• To regulate the scheme, the Government will auction a number of emission ‘permits’ up to, but not exceeding the cap.

Regulation and Trading

• Companies will be required to purchase one permit for every one tonne of greenhouse gas emission they produce over a one year period; this will be monitored by the Government’s regulatory department

• At the end of each year companies relinquish their number of permits to the government.

• Permits will be available for trade on an emissions permit ‘market’. As companies dependent on fossil fuels compete for permits the price is pushed up.

1 tonne = 1 permit

• For other companies it will be more cost effective for them to reduce their emissions rather than purchase permits at very high rates

• Allow the opportunity to sell spare permits they don’t use.

• Further investment into alternative energy technologies.

Incentive to Decrease Pollution

• Whatever direction companies decide to take, they will be managing their emission rates within the total cap with the flexibility to do so at the lowest cost, whilst at the same time effectively contributing in efforts to address climate change.

Sells unused

permits as more

cost effective to

reduce emissions

Australia’s ‘Carbon Pollution Reduction Scheme’

Invests in alternative energies and reduces emissions

Company ACompany B

Emission PermitsMarket

Regulator monitors and verifies

company emission rates

Competes with

other companies

and pays high price

for permits

Chooses to Pay to Pollute rather than implement costly long-

term organisational

changes

Operating within the capped

amount of total emissi

ons

allowedCAP

Image referenceshttp://adg.stanford.edu/aa241/emissions/emissions5.jpghttp://www.abc.net.au/reslib/200806/r263320_1098275.jpghttp://blog.wired.com/cars/images/2007/12/13/emissions.jpghttp://blogs.thecarconnection.com/blogs/paul_blog/wp-content/uploads/2008/06/tailpipe-emissions.jpghttp://www.nytimes.com/2007/06/05/business/worldbusiness/05emissions.htmlhttp://www.abc.net.au/reslib/200804/r245383_1001293.jpghttp://blogs.guardian.co.uk/environment/emissions-murdo-macleod.jpghttp://www.bc.cas.cz/en/img/vyzkum/upb-emise-oxidu-dusneho-a-methanu-z-pudy-1.jpghttp://climatex.org/media/images-image-image/Garbage_landfill.jpghttp://damiandegoa.com/images/electronicimages/sharp_refridgerator.jpghttp://www.cybertheater.com/wp-content/uploads/2007/10/phillips-42pfl9532-tv.jpghttp://www.coastalsound.com.au/web_images/Computer%202.jpghttp://upload.wikimedia.org/wikipedia/commons/a/a9/Australian_Light_Switch.jpghttp://farm2.static.flickr.com/1021/527346538_ba06fe59a4.jpg?v=0http://www.4cabling.com.au/WebRoot/ecdb2/Shops/4Cabling/4803/ED87/12E0/4D2E/C0EA/C0A8/D20C/20AA/single_0020_GPO_0020_front_m.jpghttp://www.enterprisesales.ie/product_images/products/blow%20heater%20for%20web.jpghttp://www.geology.ar.gov/images/coal_backhoe.JPGhttp://www.co2emission.co.uk/images/co2_emission_banner2.gifhttp://www.ecn.nl/fileadmin/ecn/corp/Nieuwsbrief_NL/2006/Illustraties/Uhde1.jpghttp://www.australiancoal.com.au/cleantechAus.htmhttp://energytechstocks.com.previewmysite.com/wp/wp-content/uploads/2007/12/co2-cap330.jpghttp://parks.ci.lubbock.tx.us/images/PERMIT%20GRAPHIC.jpghttp://www.tiletown.co.uk/published/2/resources/Images/Gallery/Pack_Pics/no_more_ply/Pic-J.gifhttp://www.grcblog.com/wp-content/uploads/bloggers/5/blog_images/solar2.jpghttp://images.businessweek.com/ss/07/07/0727_alternative_energy/image/slide1.jpghttp://www.dep.state.fl.us/secretary/news/2006/12/images/1212_01_solar.jpghttp://www.internationaleducationmedia.com/images/sustainable_energy_engineering.jpghttp://www.youtube.com/watch?v=nJZTFiBCM2Y

ReferencesSkinner, B.J., Porter, S.C., & Botkin, D.B. (1999). The Blue Planet: An Introduction to Earth System Science. Hoboken: John Wiley& Sons,

Inc.

Green Paper - Carbon Pollution Reduction Scheme July 2008. Retrieved August 20, 2008, from http://www.climatechange.gov.au/greenpaper/summary/index.html.