ï»¿Main Nationsâ€™ Carbon Emission Exchanges System
And Implication in South Korea
After Kyoto Protocol in 1997, the carbon emission has been issued in the World. The carbon market has rapidly grown based on Kyoto mechanism, such as CDM (Clean Development Mechanism).Actually, the main nations, such as EU, the United States, Japan, and China, has formed the greenhouse gas emission trading market. South Korea is a target country which will have to reduce the greenhouse gas since 2015. Therefore, this paper examines emission trading system in EU and China and it imply to South Korea.
II. European Union (EU)
In 2005, EU has enforced EU-ETS(European Union Emission Trading ...view middle of the document...
However, since 2012, the bounds of EU-ETS is expanded its area, such as aviation industry. Additionally, three countries, such as Norway, Iceland, and Liechtenstein, has participated since 2008.
Figure EU-ETS Operating System and Flow
Source: EU-ETS (http://ec.europa.eu/clima/policies/ets/)
EU-ETS is the first emission trading system, which target multi-country, in the World. EU-ETS is cap-and-trade system which trade emission after setup total amount of emission. It has progressed 3 steps which is separated Phaseâ… , â…¡, and â…¢. Especially, the main goal of Phaseâ…¢(2013-2020)is that the emission of greenhouse gas reduce 20% than 1990 until 2020, and reduce 50% than 1990 until 2050. EU total emission volume is decided based on average member countryâ€™s volume of emission in Phaseâ…¡. It would reduce 1.74%Tlr per year and its total allocation objective in 2020 is maximum 1,729MtCO2e. Additionally, due to aviation is included since 2012, emission celling of total allocation in 2012 is 97% based on 2004-2006 average emission; 85% is free of charge and 15% is auction. The emission celling of total allocation in 2013-2020 is 95% based on same criteria.
The basic method of emissionâ€™s allocation is free of charge until Phaseâ…¡. However, there are some problems. For instance it is difficult to propose consistent and fair standard of allocation to disparate agent, such as national, industrial, and the company which has efficiency technology or not. Therefore, the basic method of emissionâ€™s allocation is auction in Phaseâ…¢. The auction has some advantages. First of all, it has economic efficiency and simplicity. Additionally, it unify standard of allocation in EU members.
Table The Main Contents of EU-ETS Phase
Prepare Kyoto Protocol
The first performance of Kyoto Protocol
Test operation for establishment of EU-ETS System
Construct infrastructure such as supervision, reporting, certification.
Check problems of Phaseâ… and expand Scope.
Achieve non-reduction of Kyoto Protocol
Through ETS, 6.5% reduction than 2005 until 2012
20% reduction than 1990 until 2020
EU ETS cap
21% reduction than 2005 until 2005
25 countries (11,500 installation such as power, steel, glass, cement, paper making, petroleum refining)
30 countries (Include Romania, Bulgaria, Norway, Iceland, and Liechtenstein)
30 countries (Aviation, Aluminum, Petrochemistry),
Each national allocation based on Burden Sharing Agreement
Allocated free of charge based on past performance and benchmarking
Selective allowing credit apportionment through auction until each national fixed ratio(Phaseâ… : 5%, Phaseâ…¡: 10%)
Allowing only Single quartos in terms of EU
Main method of allocation is auction
Free of Charge based on benchmarking
6 greenhouse gas, which include CO2 on Kyoto Protocol
The greenhouse gas,...