Chapter 4: Emissions trading: a market instrument for our times
Charles Nicholson My role in British Petroleum (BP) in recent years has focused on international sustainable development issues. Sustainable development is a broad church, however, and working in this area takes one down many new and interesting paths. So it has been for me with carbon dioxide emissions trading systems. One of my commitments through BP is to the UK Emissions Trading Group (UKETG), and another to the International Emissions Trading Association (IETA). The UKETG has been instrumental in working with the government in the pioneering effort to develop the ﬁrst nationwide carbon emissions trading system. It is now advising the government on the proposed EU scheme. And IETA does an excellent job gathering and collating the growing amount of information and expertise on this topic. In this paper I will try to give an overview, from a business perspective, of the development of emissions trading systems. MOMENTOUS TIMES This is a fascinating, even historic, moment to be discussing carbon dioxide (C02) emissions. We are on the cusp of some signiﬁcant developments. Over the next several months governments throughout Europe will be releasing lists showing how much CO2 they will allow thousands of individual factories and power plants within their borders to emit, starting in 2005. Already a high-stakes engagement is under way as industries and companies try to position themselves to get as large a share as possible of the allowances with the proper intention of protecting their competitive advantage. Clearly, there will be winners and losers – there...
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