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What will it take to build a global emissions trading system?

According to the World Bank, which has pioneered many types of emissions trading, there are 40 nations and 20 states, provinces and cities that have implemented emissions trading systems, a number that has tripled over the last 10 years.

Together these jurisdictions now produce about 12 percent of the planet's man-made greenhouse gas emissions. Their reach is expected to grow quickly as China embarks on building what could become the world's largest cap-and-trade system and as more nations and sub-nations link their systems with one another to create markets with unified rules, more liquidity and a broader reach. CONTINUE READING >>>

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Can trading save the Amazon?

One morning two days before Christmas in 1988, Chico Mendes, the leader of a group of rubber tree tappers, walked into his backyard to take a shower. That was his routine. Two gunmen were waiting for him there, and when he appeared, they stitched his tall body with bullets. That was their routine.

Assassinations were common then in Acre, an almost lawless state in Brazil's western Amazon. Think of it as a New York-sized state where 87 percent of the land is tropical forests. Environmental groups talk about the Amazon's vast jungle as being highly valuable. They describe it as the "lungs of the planet" because its trees ingest much CO2 from the atmosphere and store it. CONTINUE READING >>>

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Carbon trading in a non-market economy: China dives in

When it comes to learning about emissions trading, China has had a leg up. The world's leading emitter of greenhouse gases has spent 15 years scouting the globe to learn from the mistakes of other nations and find the best ways to build a trading system of its own, which could become the world's largest.

One of China's earliest mentors was Dan Dudek, an agricultural economist and vice president of the Environmental Defense Fund (EDF) who, early in his career, got into an argument with its president, Fred Krupp, over whether China might be a big piece of the puzzle the group was exploring: Was there a way to use economics, rather than politics and regulations, to shift the world's businesses away from polluting the environment toward protecting it and to reward low-cost innovations that do that? CONTINUE READING >>>

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How America's regions learned from Europe's mistakes

In 2010, after the Democratic-led U.S. Senate failed to pass a federal emissions trading system, the measure was widely diagnosed as politically dead. New England states picked up some of the pieces and soldiered on, but in the West, the outlook, compounded by the recession and newly elected Republican governors who insisted the measure was a hidden tax, looked dismal. California, which fancied itself the centerpiece of what was to become the Western Climate Initiative (WCI), seemed to be in the most trouble. It had done much of the planning for this regional coalition, learning from the European Union's mistakes and taking more time to design a system of measurements and rules to put an effective cap on its biggest sources of emissions. The plan of the state's Air Resources Board started with electricity generators and large-scale manufacturing in 2013 and then spread by 2015 to cover 85 percent of the state's greenhouse gas emitters. CONTINUE READING >>>

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Europe becomes a reluctant emissions trading pioneer

When it came to creating the European Union's Emissions Trading System, now the largest system of abating greenhouse gases in the world, implementing cap and trade turned out to be much harder than the early enthusiasts of the idea in the United States had ever imagined.

The success of an emissions trading program in America's fight against acid rain in the 1990s lured both Europe and China into taking a closer look at how a market-based trading system could bring more ingenuity to focus on combating pollution at a much lower cost. CONTINUE READING >>>

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The epic journey of a modest proposal

In 1968, John H. Dales, an obscure Canadian economics professor, came back from a sabbatical determined to end what he felt was an endless and meaningless drama between environmental groups and industry over the problem of pollution. After a year of mulling over the problem, he produced a slim book called "Pollution, Property & Prices." It was the classic modest proposal from an academic, and one that the author himself said would never appeal to the opposing sides in this fight. And yet Dales' idea, popularly known as cap and trade, has spread around the globe over the last four decades. CONTINUE READING >>>

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