Climate Change Policy

World governments have developed several policy-based initiatives in an effort to curb increasing pollution levels. These initiatives range from mandatory schemes where large corporations are regulated to voluntary schemes that allow corporations and individuals to participate alike. Below is a summary of the major trading schemes implemented by various governments and NGO′s.

Regional Greenhouse Gase Initiative (RGGI) — A consortium of states in the Northeastern United States started RGGI in an effort reduce greenhouse gas emissions. Designed as a cap-and-trade system, the initiative is set to launch January 1, 2009. Participating states must reduce their emissions by 10% by 2020 and are allowed to purchase carbon offsets to meet 50% of their reductions. Currently, the participating states are Maine, New Hampshire, Vermont, Connecticut, New York, New Jersey, Delaware, Massachusetts, Maryland, and Rhode Island.

Global Warming Solutinos Act of 2006 — California recently passed the Global Warming Solutions Act of 2006, formerly known as the Assembly Bill No. 36 (Ab-32). Under this framework, emissions must be reduced to 1990 levels by 2020, which translates into a 25% decrease in emissions under a business-as-usual scenario. The emissions reduction target increases to 80% below 1990 levels by 2050. Ab-32 applies to all industries with significant greenhouse gas emissions and creates a cap and trade system similar to the EU ETS. Talks have suggested that Ab-32 could integrate with the EU ETS and RGGI.

European Union Emissions Trading Scheme (EU ETS) — The EU ETS is the largest greenhouse gas reduction program in the world, governing the largest emitters of CO₂ among the EU member states. EU ETS is designed as a cap-and-trade system and is primarily based on the framework of the Kyoto Protocol. The scheme is divided into two phases. Phase II started in 2008 and seeks to impose stricter regulation than the introductory Phase I (2005 − 2007). The overall goal is to reduce GHG emissions by 7% under their 2005 levels by 2012.

Kyoto Protocol — The Kyoto Protocol the most widely recognized policy on climate change in the world. Developed under the guidance of the United Nations, the Protocol seeks to reduce the emissions from the worlds most developed countries. 36 developed countries have ratified the protocol and are required to reduce their GHG emissions to a specified level by 2012. Another 137 developing countries are obligated to monitor and report their emissions. A cap-and-trade system is the protocol′s main driving force and has spurned the creation of the Clean Development Mechanism (CDM), a scheme that aims to use resources from developed countries to support clean, sustainable development in developing nations.

Chicago Climate Exchange (CCX) — The CCX is a North American voluntary cap-and-trade system open to a wide range of institutions. It promotes the implementation of offset projects in North America and Brazil to produce the credits traded in its marketplace.