TRADE OF EMISSIONS:
It was created in 2003 under a Directive of the EU that supposes the beginning of the European Union Greenhouse Gas Emission Trading. It is expected to be on full operation by the year 2008.
It consists on a restriction over the quotas of emission to the countries that try to sell more quotas of emission than those allowed and their biggest objective is to achieve a better redistribution of the emissions among the industrialized nations.
This restriction consists on the prohibition of the sale of CO2 until the demanded levels are restored having a term of 30 days for it.
The industrialized countries or belonging to the Annex I of the Kyoto Protocol established this system of purchase-sale of emissions of hothouse gases since it allows to those that have reduced their emissions more than that committed, to sell the certificates of surplus emissions to the countries that have not reached to fulfill its commitment.
Among the parties they will be able to negotiate all the emissions of the gases of hothouse effect coming from the quotas of emission assigned by Kyoto (only if they have completed their objective), the emissions coming from the Combined Application and of the Mechanism of Clean Development
In this trade of emissions is established the necessity of assigning the quantities to distribute among different sectors, responsible for the 45-50% of the emissions, through the National Plan of Assignment (NPA) that establishes the quantity of emissions that each one of the sectors initially implied will be able to emit: electricity generation with fossil fuels, refineries, colliery coke ovens and combustion facilities of more than thermal 20 MW (that includes great part of the cogeneration); the cement sector, the ceramic and the glass; the iron and steel industry; the paper-cardboard and paper pulp sector
If these sectors exceed the assigned quotas they will have to go to the market of emissions to cover the part of excess of emissions.
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OTHER MECHANISMS OF KYOTO
In order to fulfill the Kyoto Protocol besides the reductions of emissions of gases of hothouse effects in each country, and of the trade of emissions, other mechanisms were established like the Joint Implementation (JI) and the Mechanism of Clean Development (MCD).
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MECHANISM OF CLEAN DEVELOPMENT (MCD)
The MCD is governed by the Parties of the Protocol through the Executive Meeting.
This mechanism offers to the industrialized countries the possibility to differ clean technologies to developing countries, through investments in projects of reduction of emissions or drains, receiving in exchange certificates of emission that will serve as supplement to its internal reductions, these reductions will be verified and certified by independent entities.
To obtain the certification of the emissions, the industrialized country and the developing country receiver of the project as well, will have to demonstrate a reduction of emissions in time real measurable and lingering.
This mechanism has a special sensibility since it can contribute to reduce future emissions in the developing countries and increase the capacity of transfer of clean technologies.
JOINT IMPLEMENTATION (JI)
An industrialized country (its Government, companies or other private organizations) through the JI will be able to invest in another industrialized country and to operate in a project directed to reduce the emissions of hothouse gases or to increase the absorption through the drains.
It must be said that a serie of requirements must be properly completed in order to be able to use this mechanism, and anyway, the projects will undergo its certification from independent entities.
Benefits for the investor: He will be worthy of certificates to reduce emissions at a lower price than which it would have cost him in their national environment.
Benefits for the receiver: He will be beneficiary of the investment and the technology.
These projects could have entered in operation since year 2000, but the certificates won’t be emitted until the year 2008.