Gov't approves rules for emissions permit trading

The Czech government on Wednesday approved a law setting the rules for trading emissions permits for greenhouse gases.

If approved by parliament, the law, drafted by the Environment Ministry, will see 450 Czech companies receiving electronic permits as of January 2005. Companies will be allowed to trade the permits, but at the end of the year, the number of permits returned must correspond to the amount of emissions exhausted. Permit trading will be monitored by the state-owned Electricity Market Operator (OTE).

The Environment Ministry wants permits for a maximum of 100 mln tonnes of emissions to be issued annually in the next three years. The Trade and Industry Ministry, on the other hand, would like to permit emissions of 116.3 mln tonnes a year. The government is to deal with the issue of emission permits for 2006-2008 next week.

The volume of permits to be distributed in the medium-term has yet to be approved by the European Commission (EC). A European market for electronic greenhouse gas emissions permits will begin operating on January 1 of next year. Under the market rules, companies will return permits equal to the volume of greenhouse gas emitted. They can then sell any remaining permits to rivals whose emissions top permitted levels.

The Czech Republic pledged to reduce its overall emissions by 8 % from 1990 levels by 2012. The country has exceeded its plan and is currently 25 % below the 2012 limit.

[reality]

The Czech Republic pledged to reduce its overall emissions by 8 % from 1990 levels by 2012. The country has exceeded its plan and is currently 25 % below the 2012 limit.

This is surely a great example of what can be done if an effective carbon market place can be established. It is this approach that should be taken, not the haphazard, half ass approach of Kyoto!!