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Global cap and trade progress

A new World Bank initiative, Partnership for Market Readiness (PMR), could see some less economically developed countries launch market-based controls for greenhouse gas emissions (GHG) sooner than expected. 

In the large western economies, however, progress with emissions trading schemes (ETS) has been slow. Largely as a result of lack of government consensus and intense industry lobbying . 

Established mandatory emissions trading schemes

The EU’s scheme will be strengthened as caps are gradually reduced from 2014; more allowances are auctioned off and new sectors (e.g. aviation) come into the scheme. A new report from Sandbag shows that the EU emissions trading scheme will reduce emissions by 941Mtonnes by 2020.

New Zealand’s national scheme, launched in its present form in 2009, is currently under review.

Planned schemes

Australia’s cap and trade scheme was deferred in 2010. The government is currently considering responses to its replacement proposals, which are for a carbon price mechanism, starting in July 2012, converting to a cap and trade scheme within 3 to 5 years.

The USA has no plans for a national scheme but its first regional mandatory cap and trade scheme launches in California in 2012, as long as legal challenges don’t cause delays. Other regional schemes, involving several US and Canadian states, are also being developed.

This month the World Bank awarded 8 countries PMR grants of $350,000 to help them to develop market based methods of mitigating GHG emissions. Support will focus on capacity building to enable countries to establish baselines, targets and allocations; prepare legal and practical frameworks; and pilot schemes.  The initial funding goes to China, Chile, Columbia, Costa Rica, Indonesia, Mexico, Thailand and Turkey, with other countries to follow. Currently countries’ plans at different stages of development – with China the most advanced.  6 pilots are already in place (in the cities of Beijing, Chongqing, Shanghai and Tianjin and the provinces of Hubei and Guangdong) with plans to expand this into a national scheme by 2015.

Schemes on hold

Japan announced an ETS in 2010, but introduction has now been deferred indefinitely (although a couple of regional schemes are running) and the Korean scheme has been postponed until 2015.

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