The world’s forests need to be seen for what they are… giant global utilities, providing essential services to humanity on a vast scale. The life they support cleans the atmosphere of pollutants & feeds it with moisture.
Prince Charles

Carbon Market Overview

Kyoto Protocol

The Kyoto Protocol is a 1997 international treaty which came into force in 2005, which binds most developed nations to a cap-and-trade system for the six major greenhouse gases. (The United States is the only industrialized nation under Annex I which has not ratified and therefore is not bound by it.) Emission quotas were agreed by each participating country, with the intention of reducing their overall emissions by 5.2% of their 1990 levels by the end of 2012.

Cap & Trade

Cap & Trade is a regulatory system, where governments determine appropriate targets for reducing Industry emissions. The permits that governments grant, encourage companies to become more energy efficient . This is known as their “Cap”. Those companies which exceed their Cap, are required to buy carbon credits to offset the additional GHG emissions. This is known as “Trade.”

Existing Benefits of Cap & Trade

Cap & Trade is a proven success at mitigating environmental problems. Twenty years ago, scientists warned about sulphur dioxide poisoning, the primary cause of acid rain, and this serious threat spurred implementation of a cap and trade system. In the years since this was implemented, sulfur dioxide levels dropped more quickly than anticipated, and the result has been a huge step to reducing climate problems.

UK Government Legislation

The Carbon Reduction Commitment will bring in the UK’s first mandatory carbon trading scheme, starting in April 2010. It will cover all organisations using more than 6,000MWh per year of electricity (equivalent to an annual electricity bill of approximately £500,000). The Carbon Reduction Commitment scheme aims to reduce carbon emissions from these organisations by at least 4 million tonnes of carbon dioxide per year, by 2020.

Business Reaction

23 multinational corporations came together in the G8 Climate Change Roundtable, a business group formed at the January 2005 World Economic Forum. The group included Ford, Toyota, British Airways, BP and Unilever. On June 9, 2005 the Group published a statement stating that there was a need to act on climate change and stressing the importance of market-based solutions. It called on governments to establish “clear, transparent, and consistent price signals” through “creation of a long-term policy framework” Part of their climate change goals, was to avoid emissions and enhance sequestration in the forestry, agriculture and other land use sectors, as a critical element of climate change solution. Source: World Economic Forum – “Task Force on a Low Carbon Prosperity” Report October 2009