Isra-Mart srl:Factbox: Carbon trading schemes around the world

www.isra-mart.com

Isra-Mart srl news:

(Reuters) - Companies and governments around the world are turning to emissions trading as a weapon to fight climate change and join a global carbon market worth $144 billion last year.

Under cap-and-trade schemes, companies or countries face a carbon limit. If they exceed the limit they can buy allowances from others. They can also buy carbon offsets from outside projects which avoid greenhouse gas emissions, often from developing countries.

Following is a list of established and proposed schemes:

ESTABLISHED SCHEMES

1. Kyoto Protocol: Mandatory for 37 developed nations, excluding the United States which never ratified the pact.

Launched: 2005

Covers: All six main greenhouse gases.

Target: 5 percent average cut in 1990 emissions in 2008-2012 first phase.

How it works: Rich countries cut greenhouse gases at home or buy emissions rights from one other -- if one country stays within its target it can sell the difference to another emitting too much. Or they can buy carbon offsets from projects in developing countries under Kyoto's clean development mechanism.

The present round of the Kyoto Protocol expires in 2012 and U.N. climate talks in Mexico last week put off decisions on cutting emissions to next year.

2. European Union Emissions Trading Scheme:

Launched: 2005

Covers: Nearly half of all EU carbon emissions. Mandatory for all 27 EU members.

Target: 21 percent cut below 2005 levels by 2020

How it works: Member states allocate a quota of carbon emissions allowances to 11,000 industrial installations. Companies get most permits free now but many electricity generators will have to pay for all these from 2013.

Companies can buy carbon offsets from developing countries if that works out cheaper than cutting their own emissions.