International examples of emissions trading

The following are some emissions trading schemes proposed or in operation around the world:

Country Description of scheme
European Union EU ETS
EU wide cap and trade scheme. The world’s first and largest mandatory trading scheme for CO2 emissions. Phase I commenced in 2005 covering CO2 emissions from major installations in selected sectors, including energy, ferrous metals, mineral industry and pulp and paper.

Proposed addition of emissions from all domestic and international flights between EU airports from 2011, and emissions from all international flights that arrive at or depart from an EU airport from 2012. Proposed inclusion of aluminium and certain ferrous metal refineries, chemical industrial processes (both carbon dioxide and nitrous oxide reporting in some cases) and the gases nitrous oxide and per fluorocarbons from 2013.
Japan Voluntary Emission Trading Scheme
Voluntary scheme combined with incentives for participants. First phase launched in 2005 covering CO2 combustion from participating companies.
New Zealand Mandatory cap and trade and trade scheme that will cover all sectors and all greenhouse gases by 2015.
Norway Cap and trade scheme for CO2 emissions from large direct emitters in selected (mainly industry) sectors for 2005 to 2007. Fully linked to the EU ETS from 2008.
Switzerland Voluntary scheme in conjunction with an exemption from proposed mandatory CO2 taxes (targets under the scheme become mandatory from date of introduction of taxes). Scheme commenced in 2008. Covers CO2 emissions from large companies or groups of companies that opt in to the scheme.
United Kingdom Carbon Reduction Commitment
In addition to participation in the EU ETS by covered UK firms, the UK is proposing to implement the Carbon Reduction Commitment scheme for CO2 emissions from large non-energy intensive business and public sector entities that are not covered by the EU ETS. The scheme is a mandatory auction based cap and trade scheme (following an initial three year period with non-capped fixed price sale of allowances) covering CO2 emissions from direct and indirect (electricity) consumption. Applies to entities above a threshold for electricity consumption. Emissions covered by UK Climate Change Agreements are excluded.
United States US Federal
The 2010 United States federal budget proposes to support clean energy development with a 10-year investment of US $15 billion per year, generated from the sale of greenhouse gas (GHG) emissions credits. Under the proposed cap-and-trade programme, all GHG emissions credits would be auctioned off, generating an estimated $78.7 billion in additional revenue in FY 2012, steadily increasing to $83 billion by FY 2019.
Regional Greenhouse Gas Initiative
Cap and trade for CO2 emissions from fossil fuel electricity generators above a size threshold of 25MW in seven Northeastern states. Credits from offsets from other sectors and gases may used to comply with obligations. First phase proposed from 2009-2015, second phase proposed from 2016-2020.
Western Climate Initiative
Collaboration between 7 Western US States and 4 Canadian Provinces. Proposed cap and trade scheme commencing in 2012 (reporting from 2010) including the six greenhouse gases covered by the Kyoto Protocol. Proposed coverage includes electricity generation, commercial and industrial combustion, and industrial process emissions (above 25,000 ton threshold) from 2012. Residential, commercial and industrial fuel combustion (below the 25,000 ton threshold) included from the start of second compliance period in 2015. Other sectors may be included via ‘offset’ projects. The scheme contributes to regional goal of a reduction to 15% below 2005 emissions by 2020.

Last updated: 18 June 2010