Emissions Trading
The introduction on January 1, 2005 of CO2 emissions
rights trading in the European Union established a free market
instrument with which the Kyoto objectives could be achieved
and created a motivation for corporations to invest in climate-friendly
technologies. In this case, it is not the individual countries
who participate in trading, but rather the operators of firing
plants with outputs of at least 20 MW.
Every company involved in emissions trading is allocated
a certain number of emissions certificates. The company is allowed
to emit one ton of carbon dioxide into the atmosphere for each
certificate it has. If it emits more, then it is obliged to
purchase additional certificates. Emissions trading leads to
some companies reducing their CO2 output, which enables
them to sell the certificates they have saved.