Maxime Goossens

i6158113

Carbon trading markets

Student number I6158113

Surname, First name Goossens Maxime
Email (UM) maxime.goossens@student.maastrichtuniversity.nl
Study International Business

Course code EBC1009

Group number 22
Writing tutor name Foster, A (Angus)

Writing assignment Short Paper

Place and date Maastricht 14/11/2018

For language assessor only

Content Graded by IB tutor
Language Assign a pass/fail

 structure Assign a pass/fail

 accuracy Assign a pass/fail

 format & citing/referencing Assign a pass/fail

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Assessor’s initials
Maxime Goossens
i6158113

1. Introduction:

Since the mid of the twenty-century, the global warming problem start being part of
your daily life. Greenhouse gas emission is probably the biggest cause. Greenhouse gas
correspond principally to the carbon dioxide but also methane or nitrous oxide who are part
of the Kyoto protocol. In a way to reduce greenhouse gas emission, since 1992 United
Nations Framework Convention on Climate Change (UNFCCC) was created in Rio de
Janeiro at the Earth Summit. In 1995, the first convention took place and in 1997 that was the
COP3 with the Kyoto protocol in Japan.

2. Main body:

First of all, the Kyoto protocol is an international treaty part of to the United Nations
Framework Convention’s plans. Entered into force on February 2005 (ten years after the
signatures of eighty-four countries over hundred-nighty-twos members of the ONU), the
objectives were to reduce from 5% the greenhouse gas compared to the emissions of the
nineties.
The main idea of the Kyoto protocol is to trade emissions of carbon between a
country who is able to sells emissions (due to his greenhouse gas reduction) to a country who
has to buy more greenhouse gas emissions. This trading is under regulations and obligations
from the Kyoto protocol. On the carbon trading market, a public entity has to fix an emission
ceiling to all greenhouse gas emitters smaller than the previous one (the one from the year
before).

Secondly, the main objective behind the Kyoto protocol and the trading carbon
trading market is to reduce developing countries emissions. Indeed, the biggest greenhouse
emitters in 2014 was China with more than four thousand five hundred megaton of carbon
dioxide. That represents the totality of the world global greenhouse gas emission.
Applying the Kyoto protocol and the idea of emission trading will force organizations
to use alternative of greenhouse gas. Consumers or investors will likely trade with this new
green business. For countries or enterprises following this concept it is doubling rewarded. At
one side, they can trade the rest of their initial greenhouse emission with other organizations
Maxime Goossens
i6158113

and at the other side, in the twenty-one-century people are more tolerant with the one who
cares about global warming.
Maxime Goossens
i6158113

Thirdly, this vision of reducing greenhouse gas emission lead to a positive impact of
technology. Indeed, trying to reduce their greenhouse gas emission became one of the
principal objectives of organizations who signed the Kyoto protocol. But how can they
reduce their greenhouse gas emission?
Using new green technology. Logically, trying to reduce greenhouse gas emission
lead to trying to find new technologies to achieve this goal. In one hand, companies reduce
their greenhouse gas emission and on the other hand they create new technology in addition,
technology who are environment friendly. It is a double side positive affect on the
environmental issues that we face.

Unfortunately, trading greenhouse gas emission has a revert side to. The carbon
trading market as depict following the Kyoto protocol approach has a negative aspect.
First, it is very difficult for the authorities to limited organizations’ greenhouse gas
emission. Even if countries signed for the Kyoto protocol, there are still organizations who
try to snake the Kyoto rules by being no enough transparent of their greenhouse gas emission.
Being transparent was probably the most important step in Kyoto protocol to reduce
greenhouse gas emission. Even if, there are a lot of costly sanctions, countries do not care
about it and try to be not caught by the authority instead of trying to reduce their greenhouse
gas emission.
Secondly, fixing relative prices is a big deal to. Normally when the fixed price is too
high, organizations will not be doing the necessary to reduce their greenhouse gas emissions
and the carbon trading market will be useless. Then, when the price is too low, the carbon
trading market will self-locking the production.

3. Conclusion:

In conclusion, that is all about the debate of the carbon trading market. How can it be
efficient without being an economic brake but keeping in mind its true purpose, trying to
reduce greenhouse gas emission to deal with the global warming and all the environmental
issues?
Maxime Goossens
i6158113

References:

https://fr.wikipedia.org/wiki/Marché_du_carbone

https://www.bloomberg.com/news/articles/2018-03-26/europe-s-38-billion-carbon-market-is-
finally-starting-to-work

https://www.bloomberg.com/news/articles/2018-09-04/climate-envoys-seek-successor-to-33-
billion-un-carbon-market

https://www.theguardian.com/environment/2018/may/22/carbon-markets-back-from-the-brink-
of-collapse-says-world-bank

https://en.wikipedia.org/wiki/United_Nations_Framework_Convention_on_Climate_Change

https://en.wikipedia.org/wiki/Kyoto_Protocol

https://fr.wikipedia.org/wiki/Protocole_de_Kyoto

https://en.wikipedia.org/wiki/Carbon_emission_trading

https://en.wikipedia.org/wiki/List_of_countries_by_greenhouse_gas_emissions

Newell, N. G., Pizer, W. A., and Raimi, D. (2017). Carbon Markets 15 Years after Kyoto: Lessons

Learned, New Challenges. Journal of Economic Perspectives, 31, 4: 163-184.

Stern, N. (2008). The Economics of Climate Change. American Economic Review (Papers &

Proceedings), 98, 2: 1-37.