Context: Carbon Emissions Markets

Chicago Climate Exchange is a self-regulatory exchange that administers the world's first multi-national and multi-sector marketplace for reducing and trading greenhouse gas emissions. CCX represents the first voluntary, legally-binding commitment by a cross-section of North American corporations, municipalities and other institutions to establish a rules-based market for reducing greenhouse gases.

European Commission Trading Scheme created in January 2005 the single largest market for GHG emissions allowances. The Directive indeed directed Member States to allocate GHG emissions allowances (EUAs) for the period 2005- 2007 to large fixed sources of CO2. (A second phase is covering 2008 to 2012.) More than 12,000 fixed sources, representing about 45 percent of the EU25 total CO2 emissions will be covered. In addition, a linking directive, approved April 20, 2004 by the European Parliament, will govern the relationships between the European Trading Scheme (ETS) and the Kyoto Protocol. The linking Directive allows for the import of ERUs and CERs into the ETS under certain conditions.

New South Wales (NSW) GHG Abatement Scheme commenced on 1 January 2003 and is to remain in force until 2012. It imposes mandatory greenhouse gas benchmarks on all NSW electricity retailers and other parties. Participants are required to reduce their GHG emissions to the level of their greenhouse gas benchmark by offsetting their excess emissions through the surrender of abatement certificates.