By definition, carbon trading will only exist between countries. The term ‘carbon trading’ has been dubbed misleading by many because trading will not occur strictly between carbon dioxide but by many other greenhouse emissions. The possibility of trading carbon has been rising in recent years. In 2007, before the economic crash, plans had begun to begin pricing carbon and offering a trading scheme that would inevitably affect the world. After the crash, the program was scratched due to loss of motivation, support, and overall potency. Now that the market has shown signs of improvement, companies, such as AGL (Australian Gas Light Company) are awaiting carbon pricing to make future environmental financing decisions. The company has set a goal to reduce emissions by 5% but has stalled due to pricing negotiations. Carbon trading will bring estimated benefits globally, allowing third world countries that rarely consume their allotted emissions cap to sell what they have left and hopefully spur their economy. The promise of carbon trading has been clearly defined, but what lacks is the global support and comprehension of the possibilities.
The trading of carbon dioxide emissions is already occurring in European Union countries under the provisions of the EU Emissions Trading System. This system began in 2005 and works under the “cap-and-trade” principle. According to this principle, there is a total cap on carbon dioxide emissions and companies can buy and sell permits to use a certain amount of it. This system is at work in 30 European countries.
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