1 / 17

Designing an Ideal Emissions Trading System: Key Principles and Success Factors

Explore the components of an ideal emissions trading system as outlined by Mike Young from the University of Adelaide, delving into the principles, successful systems, and necessary elements for effective trading of emission rights.

kynan
Download Presentation

Designing an Ideal Emissions Trading System: Key Principles and Success Factors

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. EMISSIONS TRADING What would an ideal system look like? Mike YoungUniversity of Adelaide

  2. Global warming potentials

  3. CO2-e for Australia Þ CO2 + CH4 + N2O (99.7%)

  4. Negotiated December 1997 Needs 55 country or 55% ratification 6 gases 1990 benchmark 1st commitment period 2008-2012 CDM’s from 2000 KYOTO PROTOCOL

  5. { 1st Commitment Period “Emissions cap” Cap set for 2nd Commitment Period } CDM credits 2000-12 108 106 Assigned amount 100 Australian CDMs with non-Annex 1 countries 1990 1995 2000 2005 2008 2012 Years

  6. { 1st Commitment Period “Emissions cap” Cap set for 2nd Commitment Period } CDM credits 2000-12 108 106 Assigned amount 1995 Inventory (excluding land clearing) 100 97 Australian CDMs with non-Annex 1 countries 1995 Inventory (including land clearing) 1990 1995 2000 2005 2008 2012 Years

  7. Design Principles • Adaptive Framework • Clear rights, entitlements and obligations • Low transaction costs • Minimum legal risk • Equity among all sources and sinks

  8. SUCCESSFUL EMISSION RIGHTS SYSTEMS • Cap emissions • Are designed for adaptation • Allocate equitably- via permit auction- via shares- combination of two • Are pragmatic • Clear rights, entitlements, obligations • Minimal legal risks

  9. Emissions Trading • Shares of Tradeable Amount • Permits • Permit accounts

  10. SHARES AND PERMITS • Initially, shares in each gas • Shares have renewal guarantee • Fixed share of assigned amount based on inventory • CO2 - e Permits last until acquitted • Reductions shared pro-rata • Windfall gains to Crown

  11. SHARE REGISTER • Record ownership • Electronic • Minimum Trade: 1 share • Could be mortgaged

  12. Emissions Permit Account

  13. A Permit Cheque Greenhouse Date ____________ Pay ____________________________________________ __________t The sum of ________________________________ tonnes CO2-e Emissions Trading Australia Signature______________________ 807512 085 249:0223 7851

  14. AUSTRALAN GREENHOUSE GAS EMISSIONS - 1995

  15. WHAT TO TRADE? • Sufficient emissions • Sufficient firms • Low cost monitoring

  16. PERMIT ACCOUNTS • All in C02 - e • No charge for trading in Phase 1 • Account Fee • Full permit trading • Penalty - 3 times value after 1 month grace period

  17. HIGH LEVEL ISSUES • Windfall gains - 5% return to community • Legislation – Parallel in each state • Where to acquit – upstream v’s downstream? • How to allocate shares

More Related