THe Established Schemes of Carbon Trading.

ESTABLISHED SCHEMES

1. Kyoto Protocol: Launched 2005.

Mandatory for 37 developed nations, excluding the United
States which never ratified the pact.

Covers: All six main greenhouse gases.

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

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

The present round of Kyoto expires in 2012 and it remains
unclear if nations will commit to a second and tougher commitment
period from 2013 to cut emissions after December's Copenhagen
climate talks failed to seal a new legally binding deal.

2. European Union Emissions Trading Scheme:

Launched 2005.

Mandatory for all 27 EU member states.

Covers: Nearly half of all EU carbon emissions

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.

3. New Zealand emissions trading scheme

Launch: July 1, 2010

Mandatory

Covers: Forestry started first. From July 1, 2010,
electricity, industrial process emissions and transport pollution
also included. Agriculture to start Jan 1, 2015. About half of
New Zealand's emissions come from agriculture, mostly methane.

Target: The government has pledged to cut greenhouse gas
emissions between 10 and 20 percent by 2020 on 1990 levels.

How it works: Emissions units will be allocated based on an
average of production across each industry. [ID:nSP124540]

From July 1, 2010, to January 1, 2013, emitters have the
option of paying a fixed price of NZ$25 ($18.25) per tonne of
carbon, and will only have to surrender 1 unit for every 2 units
of emissions. Such assistance will be gradually phased out.

4. Northeast U.S. states' Regional Greenhouse Gas Initiative
(RGGI) cap and trade scheme.

Launched: January 2009

Covers: carbon from power plants in 10 northeast states.
Allows offsets from five different types of clean energy projects
including capturing methane from landfills and livestock manure.

Target: 10 percent cut below 2009 levels by 2018

5. Japan: Tokyo metropolitan trading scheme

Launch: April 2010

How it works: Tokyo city proper will set emission limits for
1,400 large factories and offices to meet by using technology
like solar panels and advanced fuel-saving devices starting in
April. [ID:nTOE60Q09J]

Beating the targets earns credits that can be sold locally to
those that fall short. Scheme is seen as a step towards national
emissions trading.

Government is drafting a climate bill to be submitted to
parliament by March with possible start of emissions trading next
year, though fierce industry opposition could derail that timing.
[ID:nTOE617082]



PROPOSED

1. Australia: Carbon Pollution Reduction Scheme

Launch: Planned for mid-2011 but stalled in parliament. Laws
twice revised last year but also twice rejected by Senate.
Currently before parliament for a third time.

Covers: 75 pct of all Australia's greenhouse gas emissions

Target: Australia's national target is to cut greenhouse gases
by 5-25 percent below 2000 levels by 2020, depending on what
other countries commit to. [ID:nSGE61101L]

How it will work: Australia will auction most of its permits.
The scheme plans to curb competitiveness impacts by making
permits free for companies that depend on exports, and by having
a carbon price cap of A$10 per tonne for the first year.

2. U.S. federal climate change bill [ID:nN28390301]

The Democrat-controlled U.S. House of Representatives
narrowly approved in June legislation covering cap-and-trade of
carbon emissions but it does not have enough support in the
Senate. [ID:nN04139576]

Senators hope to have a compromise bill ready for debate by
April, but it is not clear whether that will happen. Some options
avoid inclusion of emissions cap-and-trade.

Launch: 2012 under the House version

Target: Cut 17 percent below 2005 levels by 2020

How it would work: Industry would get most allowances for
free initially. Companies could offset up to 2 billion tons of
their emissions annually by paying for "green" projects. The bill
would pre-empt any similar scheme from U.S. states from 2012-17
but leaves them the option to resume trade after that.

3. Western Climate Initiative

Launch: 2012

Covers: Six greenhouse gases across seven U.S. states and
four Canadian provinces. Six other U.S. states, six Mexican
states and two other Canadian provinces are observers.

Target: 15 pct cut below 2005 levels by 2020

How it works: Phased introduction from 2012. Initially covers
emissions from electricity and parts of industry. Expands to
include transport fuels and residential, commercial and
industrial fuels not otherwise covered by phase two in 2015. Aim
is to cover nearly 90 percent of all greenhouse gas emissions in
WCI members.

4. California's Assembly Bill 32 (AB 32)

Launch: 2012

Covers: Statewide emissions reduction targets of 1990 levels
by 2020, and cutting that by 80 percent by 2050. Covers 85
percent of the state's emissions. Would also link to the Western
Climate Initiative. [ID:nLDE60L0G8]

How it will work: Initially covers electricity generation and
imports, as well as emissions from large industrial sources.
Phase II from 2015 also covers smaller industrial sources,
residential and commercial combustion of natural gas and propane,
and transportation fuels.

Target: Meeting the 2020 target would need cuts of around 11
percent from 2008 and almost 30 percent from the projected 2020
level under business as usual.

5. South Korea emission trading scheme

Launch: 2012

Covers: Not yet decided. Details on how much to cover, how to
and where to trade the emission and will be prepared by August in
a related bill, which will be submitted to the parliament.
Parliament to decide if it will approve the bill by end-Dec.

Target: Government has set a 2020 emissions reduction target
of 30 percent below forecast "business as usual" levels.