TABLE OF CONTENTS FOREWORD........................................................................................ III ABOUT THE AUTHORS. ..............................................................VII INTRODUCTION............................................................................... 1 CHAPTER 1 – Rise of the carbon markets..................................... 4 A. Introduction...................................................................................... 4 B. General carbon market characteristics............................................. 5 I. The cap........................................................................................ 5 II. The trade...................................................................................... 7 C. Regional carbon markets................................................................ 12 I. The Chicago Climate Exchange.................................................. 12 II. New South Wales, GGAS, RGGI, CCAR, and WCI.................. 15 D. National schemes ........................................................................... 20 E. Multilateral agreements.................................................................. 22 I. The UNFCCC and Kyoto Protocol .......................................... 23 II. The European Union Emissions Trading Scheme....................... 29 F. Voluntary trading – beyond cap-and-trade.................................... 31 I. Introduction to voluntary trading.............................................. 31 II. The VER market........................................................................ 33 G. Conclusion...................................................................................... 40
CHAPTER 2 – International climate legislation......................... 41 A. Introduction.................................................................................... 41 B. The science...................................................................................... 42 I. Significance of science in climate policy..................................... 42 II. Early beginnings........................................................................ 43 III. Linking science to policy............................................................ 44 C. The UNFCCC................................................................................. 46 I. The UNFCCC’s guiding principles............................................ 47 II. Substantive provisions................................................................ 54 III. Structure and procedure............................................................. 57 V