Carbon credits: Effectiveness of the system across nations and alternatives

Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. A central authority (usually a governmental body) sets a limit or cap on the amount of a pollutant that may be emitted. The limit or cap is allocated or sold to firms in the form of emissions permits which represent the right to emit or discharge a specific volume of the specified pollutant. Firms are required to hold a number of permits (or carbon credits) equivalent to their emissions. The total number of permits cannot exceed the cap, limiting total emissions to that level. Firms that need to increase their emission permits must buy permits from those who require fewer permits. The transfer of permits is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions. Thus, in theory, those who can reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest cost to society.

Emission markets
For trading purposes, one allowance or Certified Emission Reduction (CER) is considered equivalent to one metric ton of CO2 emissions. These allowances can be sold privately or in the international market at the prevailing market price. These trade and settle internationally and hence allow allowances to be transferred between countries. Each international transfer is validated by the UNFCCC. Each transfer of ownership within the European Union is additionally validated by the European Commission. Climate exchanges have been established to provide a spot market in allowances, as well as futures and options market to help discover a market price and maintain liquidity. Carbon prices are normally quoted in Euros per tonne of carbon dioxide or its equivalent (CO2e). Other greenhouse gasses can also be traded, but are quoted as standard multiples of carbon dioxide with respect to their global warming potential. These features reduce the quota's financial impact on business, while ensuring that the quotas are met at a national and international level. Currently there are six exchanges trading in carbon allowances: the Chicago [13] Climate Exchange (till 2010 ), European Climate Exchange, NASDAQ OMX Commodities Europe, PowerNext,Commodity Exchange Bratislava and the European Energy Exchange. NASDAQ OMX Commodities Europe listed a contract to trade offsets generated by a CDM carbon project called Certified Emission Reductions. Many companies now engage in emissions abatement, offsetting, and sequestration programs to generate credits that can be sold on one of the exchanges. At least [14] one private electronic market has been established in 2008: CantorCO2e. Carbon credits at Commodity Exchange Bratislava are traded at special platform - Carbon [15] place.

About ETS
Carbon will be the world's biggest commodity market, and it could become the world's biggest market overall."

The EU emissions trading scheme (ETS) is the first large-scale international emissions trading system in the field of the environment. No wonder it has been called the new grand policy experiment and a fundamental systems change in environmental governance The ETS is a scheme whereby companies are allocated allowances for their emissions of greenhouse gases (GHGs) in accordance with the overall environmental ambition of their governments National Allocation Plans (NAPs); they can then trade these allowances with each other

About Germany
The German government's policy With emissions trading the German government is successfully implementing an instrument for achieving ambitious German emission reduction targets. In the second emissions trading period from 2008 to 2012, installation operators must cut greenhouse gas emissions by 57 million tonnes annually. Compared with the level of emissions released by installations covered by emissions trading in the first trading period 2005 to 2007, the amount allocated was reduced by more than 7 percent. In the second trading period further types of installations were included in emissions trading, primarily crackers in the chemicals industry, processing installations in the steel industry and installations producing soot.
Germany is the country with the largest volume of emissions covered by the EU Emissions Trading Scheme, or EU ETS, with 31% - 455 million tonnes CO2 in 2010 - of total capped emissions in Europe coming from within its borders Recent political changes have led to raised enviormental concerns Germany has plan to reduce its carbon emission by 40% by 2020 as compared to that in 1990 To achieve Germanys domestic climate goal of a 40% emissions reduction by 2020 compared to 1990 levels, emissions reductions in both the ETS sectors (power plants and energy intensive industries) as well as non ETS sectors (agriculture, transport and building sector) are crucial. If the European climate goal remains a meagre 20%, ETS sectors will only be required to carry a small burden of necessary reductions. For Germany to successfully meet it domestic target its crucial that the ETS sectors make an appropriate contribution to reducing emissions in Germany, an ambitious EU target is instrumental in this.

Germany is of key ETS importance and interest as it is the biggest EU emitter. accounting for almost 25% of total allowances. The country has been quite timely and somewhere in the middle with regard to comparative ambitiousness. 2005 emissions showed that Germany had handed out slightly more allowances than the ETS industries needed (hence a slight over-allocation in NA I). In NAP II, Germany has seen its proposed NAP II cap rejected and considerably adjusted down by the Commission. Germany embraced the ETS only very reluctantly. Germany is a relatively clear case of institutional misfit in terms of emissions trading. In the negotiations leading up to the Kyoto Protocol, Germany was one of the leading sceptics within the EU to the use of the flexibility mechanisms. And in the EU ETS negotiations, Germany was the main laggard with several critical objections . The main instruments in German climate policy have been voluntary agreements (VAs) with industry and an ecological tax reform which was introduced in 1999. Since 2000, negotiated agreements on a sectoral basis were established. About 80% of final energy consumption in industry, and almost 100% of the electricity supply (industrial and utilities, private and public producers), were covered by the agreements. The agreements covered 18 associations/sectors, including chemicals, non-ferrous metal industry, steel, oil refining, gas and water utilities, and electricity suppliers. The substance of the commitments was, however, diffuse and the reporting of emissions under the agreements was voluntary . Within the German government, the Ministry of Economics and Technology was responsible for the agreements. With the voluntary agreements, the balance of power between industry and government favored industry, since it controlled the reporting of data, these data were primarily at the aggregate, sector level, the targets were open for interpretation, and no sanctioning mechanism was involved. This is in clear contrast to the EU ETS. The majority of German industry was generally quite happy with the regulatory regime based on the VAs and embraced emissions trading only very reluctantly and hesitantly The strongest opponents included powerful industrial associations like the Federation of German Industries (BDI) and the Chemical Industry Association (VCI). Support for the EU ETS was forthcoming from only a few big companies, including the subsidiaries of BP and Shell. institutional misfit implying higher abatement costs among emitters seems to at least partly explain why Germany has lagged behind.

GERMANY AND CARBON CREDIT AND ALTERNATIVES Germany holding the largest surpluses since Germany is the country with largest volume of emissions covered by the scheme and a key player in determining if and how the system will be reformed going forward. Surplus 13,771,571 7,549,969 6,532,315 6,009,759 3,687,210 2,957,749 2,120,412 2,016,011 1,792,871 1,672,245 Change Explanation 0 0 - 666,371 Sarstahl installations removed -13,496,246 HKM disaggregated and corrected for waste gas 3,687,210 HKM added 0 0 0 0 0 -1,584,134 Shell slips off table

Company name 1 ArcelorMittal* 2 Salzgitter 3 Dillinger Htte* 4 ThyssenKrupp 5 Httenwerk Krupp Mannessman 6 Lhoist Group (Rheinkalk) 7 BASF 8 Stadtwerke Munchen 9 Trianel

10 Dow Chemical - -

TOTAL 48,110,112 -12,059,541 Source: allocations, emissions and company data as provided by CITL. This has been manually aggregated into parent companies by Sandbag. *Companies marked with an asterisk have been adjusted for waste gas transfers based on Sandbag research. Companies marked with a cross have provided specific information on waste gas transfers. All companies listed have been approached several times for information on waste gas transfers which might affect their surpluses.

1. Urban energy sources- climate change with regard to human settlements and infrastructure
Why climate has changed because of Human settlement Infrastructure development

Newtons third law says that to every action there is an opposite an equal reaction so if we humans increase the concentration of greenhouse gases ,pollute environment with aerosols , exhaust fossil fuel, deplete forest , we should be ready to face the repercussion . However I would also emphasis on the natural mechanisms of variation like volcanic activity, changes in solar activity, climatic oscillations etc The challenges of global warming and climate change that we face today are a result of mixture of the above two so to minimise the adverse effects, we first need to step up climate protection. Secondly, we need to take precautions in the form of adaptation: By Adaption we mean to reduce the Vulnerability and to increase the flexibility to adapt to the new situation The extent to which a system is susceptible to damage caused by climate change is known as vulnerability. Vulnerability depends on a variety of factors. External factors are the nature, scale and speed of climate change and their variations. Internal factors are the sensitivity and adaptive capacity of the system in question. But we need to understand that adaptation and prevention are not substitutes of each other although there is a fine interconnection between the two Prevention can be quantified like we can say that we need to reduce the greenhouse gas emission by a certain percentage but its very difficult to quantify the extent of adaptation What a government needs to do 1. Research provide people with data a. How many locals are aware about the changes in environment we all feel it but we never talk about it 2. Steps should be taken by the local government ,to give more responsibility to the citizens

What is the impact would it have on Human settlement Infrastructure development Health , As temperatures rise, food can perish faster, leading to more frequent gastrointestinal infections for example caused by Salmonella. People may be injured or even killed by intense rainfall, floods, storms, avalanches and landslides. In the heat-wave summer of 2003 some 7,000 people in Germany alone died of heart attacks, cardiovascular diseases, kidney failure, respiratory problems and metabolic disorders as a result of heat induced stress. There is also reason to believe an in increase of cases of skin cancer and resporaitory problems. Authorities and research institutes should work together and take joint precautions which is not only adapting to the existing monitoring system but also understand the behaviour and propagation of climate sensitive pathogens and provide sufficient information to experts to identify solutions pertaining to them. So to be able to assess the adverse effects of climate change on human health and take effective countermeasures, it is therefore a need to obtain and analyse data on a targeted basis and to communicate important findings to specialists and the general public. The flow of information must be further improved to ensure that such information reaches hospitals, crches and the disaster control authorities in good time. Health needs good surroundings Construction sector Water regime, coastal and marine protection Making efficient use of water Adapting infrastructure sewage system,water storage facility o avoid supply shortages during periods of drought, infestation of water with germs, or situations where intense rainfall causes combined sewer systems carrying domestic wastewater and runoff from sealed surfaces to overflow.

Soil Bilogical diversity Energy industry o If the climate becomes generally warmer, less heating will be required for buildings. At the same time the need for cooling could increase. o These are the important guiding factors for the energy industry. o Moreover storms, floods and low water situations could affect power plants, electricity and other energy infrastructure facilities, or temporarily prevent waterborne supplies of raw materials e.g. coal for power plants. o This could result in supply shortages and price increases. o Coal, gas and nuclear power plants all require cooling water.

o o o o o

Falling water levels in rivers due to long periods of drought cause problems in this respect: operators have to reduce output, either because there is not enough water available or because the heated water returned to the river would place additional burdens on river ecosystems already severely stressed by heat and drought. This is exacerbated by the fact that the demand for power is higher during hot periods because fans or air-conditioning systems are working at full blast. A better alternative is to insulate roofs and walls and plant shade-giving trees. This will hardly be possible everywhere, though, so heat-induced demand for power will tend to rise. Climate change can also have far reaching consequences for systems for generating renewable energy. The scale on which biomass is available depends heavily on the soil and the climatic conditions. Moreover, changes in rainfall have an impact on hydro power in particular. In view of increasing storms, requirements regarding the strength and stability of solar and wind power systems will increase. At the same time, however, decentralised generation of energy and a sustainable energy mix including renewable energy sources make for greater security of supply

Germany Facts
20% energy coming from renewable resources Climate-damaging greenhouse gas emissions are to be reduced by 40% by 2020, 55% by 2030, 70% by 2040 and by 80 to 95% by 2050, compared to reference year 1990. Primary energy consumption is to fall by 20% by 2020 and by 50% by 2050. Energy productivity is to rise by 2.1% per year compared to final energy consumption. Electricity consumption is to fall by 10% by 2020 and by 25% by 2050, compared to 2008. Compared to 2008, heat demand in buildings is to be reduced by 20% by 2020, while primary energy demand is to fall by 80% by 2050. Renewable energies are to achieve an 18% share of gross final energy consumption by 2020, a 30% share by 2030, 45% by 2040 and 60% by 2050. By 2020 renewables are to have a share of at least 35% in gross electricity consumption, a 50% share by 2030, 65% by 2040 and 80% by 2050. As a response to the nuclear disaster in Fukushima, in summer 2011 Germany adopted decisions on the gradual phase-out of nuclear power by 2022, greater energy efficiency and an accelerated switch to renewable energies. To this end, the German government drew up a concrete programme of measures and a sound financing plan for its implementation.

How are they doing it

Faster expansion of renewable energies- To guarantee affordable electricity prices, the expansion of renewables must be cost-efficient. Renewables must evolve from a niche market into a volume market. The sooner this happens, the stronger the growth dynamic arising from the switch to renewable energies will be. Integration of renewable energies into the overall energy system The "Offshore Wind Power" programme of the Kreditanstalt fr Wiederaufbau (KfW) supports the establishment of the first 10 offshore wind farms with a total of 5 billion euros, in order to gain valuable experience in the field.It is important to invest in these technologies now. In this way the huge cost reduction potential can be quickly exploited. Energy efficient buildings In the building sector economic incentives and the requirements of energy saving legislation will remain key elements of the strategy to increase energy efficiency and for climate protection. Ambitious standards aim to raise efficiency in buildings. In particular, the Energy Saving Ordinance (EnEV) stipulates that from 2012 to 2020 standards for new buildings are to be gradually brought into line with the future European standard for nearly zero-energy buildings, as long as this is economically acceptable based on a balanced consideration of the burdens for owners and tenants. The German government is leading the way: from 2012 all new government buildings will conform to the standard for nearly zero-energy buildings.

Generic
Global trends, including our growing concerns about climate change, energy security and the adverse impacts of rapid urbanization, are providing substantial market push for energy efficiency and renewable energy to support sustainable development. The biggest challenge of 21st centurary is to develop sustanaible energy sources , innovative infrastructure solutions and new governance for our urban population where more than half of the worlds population is residing (Germany around 60 million of 80 million are in urban cities) However, to be effective engines for sustainable change, city governments will need to build their capacity for sustainable energy planning, design and development to assure responsible resources management and to establish frameworks within which city officials, developers, utilities, financiers, NGOs and other market players can collaborate to integrate and optimize clean and efficient energy use in the urban built environment. It is noteworthy that as climate changes patters of consumption of energy also changes taking a smiple example that when colder regions become warmer then they would need less energy to heat their homes. While visa versa for people living in hot regions there requirement would go up So what are the main challenges that we face to Cities run on energy and require land their burning of fossil fuels and their contribution to land clearing combine to contribute massively to the concentration of greenhouse gases in

the atmosphere they are also extremely vulnerable to energy scarcity, to energy price rises and health impacts of very poor air quality

What needs to be done We suggest that there should be a demand led approach to energy planning Understanding the needs of the users Good energy planning needs to be informed by the right kind of information. It is fairly easy to gather supply information (how much oil, electricity, gas etc. the city uses), but it is more difficult to gather information on who uses what energy sources, how they use these and why. This kind of energy information is very important for sustainable energy planning, because your focus needs to be on meeting energy users needs in the best way possible. There are very significant economic, social and environmental benefits which can be gained by planning according to people and industry needs: these therefore must determine a city or towns energy plan. The needs of energy supply industries and the energy sources which they supply often dominate energy planning. The supply industries are also often very powerful so they can push their needs over the needs of users. Sustainable energy and climate action planning requires a very different approach: first of all it must put the energy service needs (such as the need for a warm or a cool house, hot water, cooked food, transportation of goods, welding, public lighting etc) of the users and the city first. This is because energy service needs do not necessarily need to be met with a supply of energy. Take for instance the need for a warm house in winter or a cool house in summer this can be met by installing a ceiling and insulation or by overall energy efficient design for new build; the need for hot water can be met by installing solar water heaters. A supply led regime would just assume that the household could use electricity for heating or make some other plan from the energy sources available.

A demand-led approach would also plan at a much more local scale and try to create closed/no waste systems: for example the energy input required by an industry for production may be able to be supplied by the waste energy and waste products produced by that same industry or by an adjacent industry. A good demand-side database is important in order to develop energy action strategies and evaluat