Carbon Emission Trading Carbon emission trading is about the trading of carbon dioxide that currently constitutes the

bulk of emission trading. This kind of trading has started in among the developed countries which in order aim at the reducing that carbon emission in to the atmosphere that creates climatic changes and ecological imbalance in the environment. This carbon trading was rather to reduce the emission. It is necessary to avoid the climate changes. UN frame work was adopted by the nations around the world on 9th may 1992 on climate changes. This was called as the initial step taken towards global warming complex environmental issue was persisting. The second step was taken after five years that was on December 1997 when the nations adopted the Kyoto Protocol. The objective of adopting this protocol was to decrease the emission of green house gases in to the atmosphere by means of new approach which causes threat to the climatic changes. The carbon trade came in to existence in accordance with Kyoto Protocol. It is an agreement signed in Kyoto in Japan where 180 countries were called to sign the agreement agreeing to reduce the carbon emission. Were 38 industrialized countries were called by Kyoto to reduce the carbon emission by 5.2% between the year 2008 to 2012 compared to the carbon emission during 1990s. The need for the carbon trading is that like buying and selling the commodities the carbon was also start as trade here countries were agreed to have license of carbon emission where they can buy as well as sell. If a country has carbon emission less than what they have license they can sell their capacity to other country who feel they have more emission. This in simple called as carbon emission trading. In other word the carbon would be give an economic value which allows the company and nations to buy and sell carbon. It’s not buying or selling the carbon gas it is the rights to emit the carbon. It depends on the countries capacity to store without allowing it to enter the atmosphere. The more capacity to store the more nations can charge. This scheme was started on January 2005, involving 25 member states. This process is classified into phases; first phase was between the years 2005 – 2007 it is concentrated on reducing the Carbon dioxide gas by method of carbon trading. Subsequently the second phase started to run from the year 2008-2012 as to coincide with Initial commitment to Kyoto protocol. The top scientists Thomas Karl and Kevin Trenbreth who where designated as director of NOOA’s National climatic Data center and Head of Climate Analysis Section at National Center for Atmospheric Research defined the climatic change: “There is no doubt that composition of atmosphere is changes due to human activities and the green house gases are the largest human influence on global climate,” (Karl, Trenberth, 2003). It is said that between 1990 and 2100 Probability for rise in global temperature is by 1.7 to 4.9 degree Celsius due to the human activity.(NACR, 2003) Scientist have started to relate the concentration of carbon dioxide in the atmosphere to the global warming and eventually to the climatic changes. It is to be noticed from this that 45% of carbon dioxide emission is by the developed countries which the main green house gas that causes global warming. “The most of the warming observed in last 50 years is due to the human activity this is evidence from IPCC “(IPCC Third Assessment Report. Summary for Policymakers, 2001). The fast growth of industrialization and increasing demand for the energy resource is main fact for increase in carbon dioxide concentration in the atmosphere. The BBC report on the data presented by UN commission shows the increase in carbon dioxide emission among the

(Haddad. Members of the states have accepted to allow the company to produce carbon dioxide free of charge. 2002). iron and steel factory and oil refineries and most importantly power and heat generating industries. They have setup new innovative approach to fight against the industrial polluter and started to invest on new technology to have low carbon economy. 2004) . Even after if the company need extra allowance for carbon emission they to buy it at market rate which determined by Supply and demand for carbon allowance. One allowance is the rights to company to produce one tone of carbon emission. ceramics. According to EU carbon trading is trading of carbon allowance.(Economist. mainly the large polluters like paper. Companies which produce carbon dioxide below their allocated allowance can sell their excess allowance to company which produces carbon dioxide exceeding their allowance. Figure 1: (Laurance. 2007) The above figure show the carbon dioxide level that rose markedly after the industrial revolution and far more dramatically in recent decades.4% within the period 2000 and 2004.41 industrialized nations is 2. Shown are the annual mean concentrations (in parts per million per volume of atmosphere). This threat has trickled the European Union to focus on reducing the emission of the green house gases. 2000). This concept was developed based on “Cap and Trade” basis which was introduce by the America in the early 1990s . It was achieved at much lower cost where initially the first phase was estimated to range between US $181 and US $981 but it got over with in US $150 (observer. This led to other project of reducing led and other pollutants from gasoline. In the environmental point of view the companies are made to invest on the new eco friendly technology to reduce their carbon emission and to restrict them with in permitted allowance for emission. They had other regulation where if the company produces more carbon dioxide excess to their allowance they were .This system was formed by the government of united states and was successful by reduce air pollution by 50% caused due to the emission of Sulphur dioxide. This has create threat to climate change which eventually as threatening to human life and imbalance in the eco system. The primary target of EST is on Carbon dioxide emission. This kind of trading can support the system.

Enel from Italy. On this success of system it has been started to follow by companies of other nation like Iberdrola a Spanish company. Improve the quality of our environment by making it less ordure and diseases causing elements are reduced. and Electricite de France. Penalty of 40 Euros in 2007 for every one tone exceeding the allowance and punishment was also there to pay penalty up to 100 Euros. Advantages of Carbon Trading          Like other business the carbon trading also has some advantages involved with them CER revenue of the country increases. He also said that if this environmental policy is imposed on the global scale first mover countries who adopts will get opportunity to find some new technology and export them to other nations. Project is complying with MDG Conclusion . The macro level. Carbon trading has made the companies to find and invest on the new eco friendly technology and use different energy source of low carbon emission.2006).al. Proper utilization of available resources Ground water and surface water pollution has been reduced in turn the health hazardous problem is also reduced. 2005). For example the large companies like E. They have created job opportunity for the poor people which help in decreasing the poverty. Reduction in emission of green house gases from dumping which is the major cause for global warming. With the economic point of view they r broken down in to micro and macro level economic defenders. These penalties were the reason to have an idea to start the carbon trading. (Business Europe. 2003). Potter discussed that initiating an environment policy role can lead a way for new technology and innovative ideas by the company” (Taistra. In the micro economical level they feel that this carbon trading is very promising that reducing the production of carbon dioxide they were able to make profit by selling their excess allowance (Sathiendrakumar.penalized to pay penalty. starting of new industry specializations helped the growth of financial advisors and carbon trade consultants as well as the improving employability opportunity. BP being leading Oil Company has introduced new emission reduction system in accordance with regulation policy. 2000 cited in oberndorfer et.ON UK began to setup win farm which help them to use alternate energy source and reducing the carbon dioxide emission. It has created awareness among the public on way to the solid waste and methods of recycling the waste.

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