An overview of greenhouse gas emissions trading pilot schemes and activities

Under the Kyoto Protocol it was agreed to allow 'flexibility mechanisms' to help countries meet their greenhouse gas (GHG) reduction targets at lower cost. One of these flexibility mechanisms is emissions trading (ET). However, experience is lacking on how such a complex trading system will be put in place domestically and internationally. National governments and the private sector are beginning to explore ET opportunities. This paper provides an overview of progress in domestic GHG emissions trading as well as some of the major private sector initiatives, both in Australia and internationally. It concludes with some general observations on where we might go from here to establish a workable and effective ET pilot in Australia