A new report from Aite Group, LLC provides an introduction to the carbon emissions market and examines its regulatory and voluntary frameworks. The report looks at the Kyoto Protocol as well as various regional initiatives. It also considers probable regulatory developments, and outlines execution and clearing processes for the carbon emissions market.
Reducing the emission of greenhouse gases into the atmosphere to slow global warming has been a much-discussed subject for many years. Beginning with the Kyoto Protocol, which laid a framework for 37 industrialized countries and the European community, a new commodity was created in the form of carbon emission allowances and offsets. While the United States is not signatory of this protocol, the Obama administration is determined to institute an emissions reduction policy by the end of 2009 as parties of the United Nations Framework Convention of Climate Control (UNFCCC) meet in Copenhagen for the last time before the Kyoto Protocol runs out in 2012.
"The United States needs to be part of the new agreement in order for carbon trading to reach new heights," says John Jay, senior analyst with Aite Group and co-author of this report. "The Obama administration is leaning toward a cap-and-trade policy, but there is a possibility of a straight carbon tax, favored by large businesses."
"The regulatory model in the United States will require a joint effort between EPA for registry scrutiny and the CFTC for market monitoring," adds Paul Zubulake, senior analyst with Aite Group and co-author of this report. "The issue of allowance handouts versus allowance auctions will be debated; the most likely outcome will be a hybrid approach."
This 33-page Impact Note contains 12 figures and three tables. Clients of Aite Group's Institutional Securities & Investments services can download the report by clicking on the icon to the right.