Fed: Emissions trading how it works

AAP General News (Australia)
12-15-2008
Fed: Emissions trading how it works

Emissions trading - how it works:



* Cap-and-trade trading mechanism sets a price for the right to generate carbon pollution.

* Initial starting price estimated at $25 per tonne of carbon, capped at $40 a tonne,
increasing annually by 5 per cent above inflation until 2014-15.

* Companies buy or are given free permits, which are tradable.

* Number of tradable carbon pollution permits will be equal to the cap, which is the
limit on aggregate annual emissions.

* No limit on emissions from individual sectors - firms or facilities and companies
are free to emit at whatever level they choose.

* Companies surrender permits for each tonne of carbon they emit.

* Scheme due to start in July 2010.

AAP rl/maur/tnf

KEYWORD: CLIMATE WORKS (FACTBOX)

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