Economics:Emissions Trading - Essay Example

Firstly is the write out by Carter in year 2002 in which he notes that the historic moment that would have led to a million steps ahead was not really implemented by all stakeholders. This can be noted where, in the negotiations of year 2001 all nations which had representatives in attendance made an agreement to put into application the Kyoto protocol terms. These terms were wholly set to bring down the greenhouse gases emissions to manageable levels. Signatory nations consented upon creating provisions of a system that would allow trading system for emissions.

This agreement was meant to aid countries in the compliance with this protocol by way of those with extra emissions by those countries that still remained below the caps set regarding pollution. However, complaints have still been floated where it has been said that the trade as well as legal issues hinder the application of this trading of emissions. The 2001 Kyoto protocol had three sections with emissions trading as the major point in focus. In particular, Article number 17 of the same protocol set out the emission amounts assigned between the industrialized nations.

The other related Article is Article number 12 which gives these industrialized nations a go ahead to take up projects in the developing nations enhancing reduced emissions and eventually achieving sustainable levels of development. Article 6 stipulates on the transfer deals where units of emission reduction are exchanged between countries. Formal guidelines on the emissions’ trading were not set, though. One hypothetical illustration is given by Carter to explain how emissions trading would take place.

This is done by first putting into account that the protocol put pollution ceilings where any nation remaining below the ceiling would receive the credit. Take a nation X which emits 200,000,000 metric tones of Carbon Dioxide in year 1990 and the expectation was that it would reduce emissions by 10% by a given year N. If the case was that this nation X actually reduced these emissions by 25% to 150,000,000 metric tones, it would get rewarded with 30,000,000 emission credits for the excess reductions.

The countries which become exporters of emissions between 1990 through 1998, where they produced excess emissions included Russia and Japan. Their emissions were as per the table below; Note that the Kyoto protocol set the base period as 1990. Figure 1: A table showing the green house emissions in Japan and Russia; Two emission exporting countries Year Japan Russia 1990 292212 - 1991 298188 - 1992 301497 541492 1993 294683 502268 1994 308600 433935 1995 310287 422068 1996 318686 415296 1997 317596 400998 1998 309353 391535 1999 - - (Carter, 2002) Hillebrand writes in his book that the notion of emissions trading came about in 1990.

However, the prohibition of the growth of economies in order to achieve environmental wellness was not to become so popular especially among politicians like members of congress, mayors, and governors. The most recent Kyoto protocol required that all nations in entirety involved in the agreement to bring down their emissions from 2008 to 2012 by around 5% under the levels of 1990. Those nations which ratified this protocol automatically showed commitment to emissions reduction of carbon dioxide as well as other gases emitted from greenhouses. Another