Emissions in Europe
The EU Emissions Trading Scheme (EU ETS), which came into effect from 1st January, 2005, established the world’s largest market in emissions allowances. Each EU ETS allowance allows holders to emit one ton of carbon dioxide or equivalent gas. EU ETS regulates carbon dioxide across the entire European Union, for industries as varied as power generators, mineral oil refineries, offshore installations and other heavy industries.
Under the EU ETS rules, each member state has to create a National Allocation Plan which lays out how the country’s total emission allowances (European Union Allowances or EUAs) will be allocated to all installations that hold a permit to emit carbon dioxide.
The EU ETS is a cap-and-trade scheme, under which the emission allowance of each installation is capped. Installations (or companies) who have requirements beyond this cap level, can trade EUAs in the markets.
Emissions in the United States
The United States has been trying to regulate emissions for over three decades now. Back in 1990, the Clean Air Act established an SO2 trading system under the Acid Rain Program. The program lead to a reduction in SO2 levels by 50% 1980 to 2007. According to many experts the SO2 emissions trading system brought down the cost of controlling acid rain by 80%.
In 2011, the Cross-State Air Pollution Rule (CSAPR) modified the trading program by creating four different trading groups for SO2 and NOx
In 1997, Illinois started the emissions Reduction Market System— its own trading program for volatile organic compounds in Chicago. In 2009, the Regional Greenhouse Gas Initiative (RGGI) saw nine states in the Northeast form a cap-and-trade carbon dioxide emissions program.
2003 was an important year for emissions trading. U.S. corporations began first trading CO2 emission allowances on the Chicago Climate Exchange voluntarily.
In the same year, the EPA began its NOx Budget Trading Program (NBP) aimed to reduce emissions of nitrogen oxides (NOx) in the eastern parts of the United States.
Where are Emissions Produced?
The world’s totalCO2 emissions in 2010 were 31.3 million thousand tons, out of which 26% came from China, which is the largest emitter of CO2 in the world. The United States contributed around 17% of CO2 emissions (4.4 million thousand tons) in the world, followed by the European Union, whose CO2 emissions were 13% of the world’s total.