|
|
|
|
|
|
Climate Change and CDM - Emissions trading |
|
|
|
|
|
Why does the Kyoto Protocol allow emissions
trading? At first blush the obvious way to limit emissions is
to establish a target (say 20%) and then compel each country
to effect a pro rata reduction (ie to produce only 80% of the
pollution it produced before). By this logic, each country
would then compel all polluters within the country to effect a
similar pro rata emissions reduction of 20%, which would lead
to each country and also the globe effecting the desired 20%
reduction in emissions.
Economics dictate that savings
in emissions should be effected where they are the cheapest.
Emissions trading facilitates this.
By example:
Persons A and B must both cut emissions from their similar
factories by 20%. This can be done by installing expensive new
technology that will lead immediatly to a 40% saving. However,
neither can afford the technolgy. If A thus installs the
technolgy and effects a saving double to what is required
(40%), B can buy half that saving from him (20%). In this way
A and B can both afford the saving and they both comply with
requirements.
The Kyoto Protocol contains exactly this
logic and countries will consequently be able to either effect
an emissions saving or to buy one from some other country that
was able to effect a greater saving than required, inter alia
through the CDM.
For some theories on equity and
emissions permits, click on the menu at the left bottom of the
page
|
|
|
|
|
|
|
|
| | |