Emissions Trading Scheme For Airlines

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There are significant number of countries where there is carbon emissions trading scheme. Like Australia, New Zealand, Switzerland, United Kingdom and some many more. China has launched its first carbon emission trading scheme. Providing a market incentive to control pollution, companies which exceed their quota of carbon emissions can buy unused allocations from others- as per the scheme. It is unlikely to have much impact as analysts say the scheme’s limited range means. With some permits allocated free and others auctioned, companies must construct a permit for every tonne of carbon dioxide they produce, under the emissions trading system. Such as solar panels or wind farms, awarded by the United Nations to projects that cut emissions in developing countries, companies can also top up their permit quota with carbon credits. Rather than make real reductions, IATA (International Air Transport Association) resolution could allow airlines simply to buy low-cost carbon credits to offset their emissions, as green campaigners pointed out. Due to a surplus on the market carbon credits are presently at rock bottom prices. Companies were awarded far more free permits than they needed as they covered by the EU’s emissions trading system. Bill Hemmings said that better air traffic control, better planes and bio fuels alone can solve the problem as the IATA resolution represents a welcome departure from their chronological position. He is the aviation manager at the green campaigning organisation Transport and Environment. The ICAO and the success of the IATA resolution also depend on whether governments can agree later this year (2013) on how to adjust airline emission.

Figure: Celent experts the market to surpass €40 billion by 2012, as while it is difficult to make assumptions about a market that is so dependent on regional and international regulations.

European Regulation imposes restraint how unused carbon emission is permitted. Under directive 2003/87/EC the opening of the United Kingdom Emissions Trading Scheme in 2002 was a forerunner to the European Union (EU) wide scheme. Under the Green House Gas Emissions Trading Scheme Regulations 2003 (SI 2003/3311) the EU scheme has statutory backing and has been transposed. To designate an aircraft operator to be subject to the regulations where they do not appear on the commission list the UK regulations allow for the Secretary of State.

Carbon emissions trading specifically targets Carbon dioxide and it currently constitutes the bulk of emissions trading.

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