Geoscience Reference
In-Depth Information
schemes would be included. As there are currently no other schemes it would have in-
cluded 60 per cent of the world's international commercial aviation emissions. The airline
industry and countries including China, India, Russia, and USA reacted adversely to the
inclusion of the aviation sector. They argued that the EU did not have jurisdiction to regu-
late flights when they were not in European skies; and China and the United States
threatened to ban their national carriers from complying with the scheme. On 27 Novem-
ber 2012, the United States enacted the European Union Emissions Trading Scheme Pro-
hibition Act, which prohibiting US carriers from participating in the European Union
Emission Trading Scheme.
The EU's ETS works as it includes a group of developed countries and the emissions al-
lowances are agreed in advance and take into account the different countries' energy mix
and level of development. The ETS also limits how many carbon credits can be bought
from other projects from developing countries through mechanisms such as the CDM.
This is because there is a large cost differential in cutting carbon emissions between the
developed and developing world: it is much cheaper to cut or avoid emissions in develop-
ing countries. Hence a global carbon trading scheme would be highly problematic due to a
number of key reasons. For one thing, it act as a form of colonialism, where rich countries
could maintain their levels of consumption while getting credit for carbon savings in inef-
ficient industrial projects in poorer countries. Companies in both China and India have
already been found to be playing the system by significantly increasing their GHG emis-
sions to gain carbon credits. Other criticisms of a possible global trading scheme include
the fact that these schemes create new uncertainties and risks, which can be commodified
by means of derivatives, thereby creating a new speculative market, which as we have
seen have caused huge problems with food prices.
