“Our freedoms, our comforts, our prosperity are all the products of fossil fuel, whose combustion is also responsible for climate change. Ours are the most fortunate generations that have ever lived. Ours might also be the most fortunate generations that ever will. We inhabit the brief historical interlude between ecological constraint and ecological catastrophe”
- George Monbiot, author of the book In Heat: How to Stop the Planet Burning
On 9 May 1992, governments around the world adopted the UN Framework Convention on Climate Change, that can be truly called the first step towards a challengeable and complex environmental problem of global warming. Five years later, on 11 December 1997, governments took a next step and adopted the Kyoto Protocol. Based on the framework of the Convention, the Kyoto Protocol is aimed to decrease the level of greenhouse gas emissions by means of the new innovative approach in addressing the problem of carbon dioxide and tackle the serious threat of climate change. This paper will look further into the carbon trading system and examine the opportunity for providing the long-term competitive advantage to European industry by identifying and confronting the key determinants and core benefits of this emission trading systems and providing some real life examples.
The scheme was launched on 1 January 2005, involving 25 Member states. The first phase that will deal with the reduction of CO2 emissions by means of carbon trading system will last from 2005-2007 and, eventually the second phase will run from 2008-2012 to coincide with the first Kyoto Commitment Period.( European Commission, 2004)
In order to fully understand the impacts and the working of carbon trading system, just as the net benefits, it is important to inves ...