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The future of the Carbon Market Approach under the United Nations Framework Convention on Climate Change (UNFCCC) is uncertain. However, further development of Carbon Markets is expected. This paper estimates the average carbon price of the carbon emission permits (COP-approved units) acquired by the Spanish government and also a more realistic figure for the average carbon cost of the aforesaid emission permits. This is very useful for evaluating and comparing different carbon prices and markets. In addition, the paper contributes to the existing literature by providing a deeper understanding of the flow of emission permits between the European Union Emission Trading Scheme (EU ETS) and the Emission Trading Scheme (ETS) under the Kyoto Protocol. The main conclusions are that the estimated carbon price and cost are both lower than other reported prices and costs. This may go some way towards explaining why the government preferred to use the Flexibility Mechanisms and acquire an especially large number of COP-approved units (mainly Assigned Amount Units (AAUs)) through bilateral transactions with other Annex B countries, instead of launching actual greenhouse gas (GHG) abatement projects in the country. Moreover, more transparency is needed in regard to bilateral transactions of AAUs between the Spanish government and other Annex B seller countries.

Due to the severe problems caused by global warming, controlling greenhouse-gas emissions has become an emerging topic around the world. This situation has led to the implementation of legislations, forcing companies to implement innovations and strategies to prevent and reduce carbon emissions. Nevertheless, the effectiveness of implementing these strategies and the estimation to fulfill Kyoto Protocol's 2020 target Emission Trading Schemes needs to be further analysed and discussed. This paper reviews the existing greenhouse-gas-emission legislations, as well as carbon offset programs worldwide. A detailed analysis on carbon emissions trends related to emissions penalties is shown for six major countries. The optimal penalty for emissions trading schemes is also analyzed and discussed in this paper. Future changes that could be made to the existing programs for enhancing their effectiveness are also suggested. It was found that carbon emissions decreased around 1.58% per year since Emission Trading Schemes implementation. Around 23.43% of CO2 reduction can be reached after 10 years of Emission Trading Schemes implementation, compared to the trend when Emission Trading Schemes was not implemented. Despite Emission Trading Schemes implementation is extremely recent, based on the existing data a first estimation of the optimal penalty in achieving the maximum carbon reduction it was found around US$90.22 per tonne. However, as the implementation period of Emission Trading Schemes is still limited for most countries, it is necessary to explore similar analysis as future work.

Environmental system thresholds have been crossed for a number of dimensions of global environmental pollution, such as greenhouse gas emissions. Under this scenario, institutions and corporations are required to implement sustainable policies as a condition for humanity staying within planetary boundaries. Accordingly, the European Union created the largest Emissions Trading Scheme in the world with the aim of properly managing corporations' carbon dioxide reductions. This paper aims to contribute to the literature focused on testing the effectiveness of institutional environmental management policies. Specifically, this research evaluates whether the objectives of the European Union Emissions Trading Scheme are partially achieved by analyzing the dynamics of carbon assets and the main energy commodities worldwide. This paper provides relevant information both for policy makers and company managers so that contributions towards the common goal of developing a clean energy future and curbing climate change are ameliorated. Based on wavelet coherence analysis, this paper proposes a model-free way of estimating the time-varying correlations between carbon assets and energy commodities at both high and low frequencies. Our central results reveal that carbon assets and energy commodities present a changing lead/lag behavior at different frequencies. The energy commodities lead the European Union Allowances returns at medium frequencies, but the contrary was true for the highest investment horizons. This finding should be in line with the goal of significantly reducing emissions because during long cycles if the majority of companies have not switched to cleaner industrial processes, they must buy more carbon assets, increasing their prices. In that case, energy commodities would be more expensive because of the energy commodities' market behavior during long-term horizons with European Union Allowances lead. The Certified Emissions Reductions lead in a negative way most of the energy commodities at medium frequencies, thus indicating that investors handling energy commodities-oriented portfolios could incorporate the mentioned carbon assets for diversification purposes. These specific findings suggest that polluting activities would be more expensive, which would provide an incentive to companies to implement environmentally–friendly industrial processes. The European Union Emissions Trading Scheme can result in significant emission reductions and compliance of the European Union with the objectives of the Kyoto Protocol.

Great interest has been in unilateral climate policies, given present difficulty of establishing stable global coordinated agreements. In this paper, we investigate underlining factors explaining large differences in performances, when the same carbon emission reductions are achieved in different abating countries. To this end, we develop a new multi-country general equilibrium model, incorporating six countries (or world regions), two goods, six production inputs, capital mobility, energy mobility and international trade. Meanwhile, we adopt two performance indicators, with carbon leakage representing environmental efficiency and carbon emission abatement costs revealing cost-effectiveness. Our findings are as follows. Firstly, there are large differences in performances among these unilateral climate policies, as evidenced by large differences in leakage rates and carbon emission abatement costs. Secondly, the new global climate treaties to replace the Kyoto Protocol should be able to induce more carbon emission reductions in countries with low carbon emission reduction costs, since such setting contributes to global cost savings. Finally, developed countries have high carbon emission abatement costs compared with large developing countries (China and India in this paper), implying that there should be trade-off mechanisms between efficiency and equity regarding how to allocate carbon emission reductions among countries.

Europe 2020 strategy highlighted that sustainable consumption and production requires resource and energy efficiency. In terms of sustainability in energy, carbon footprint, conservation, efficient energy use, and emissions trading are some major concerns. Under the Kyoto Protocol, a trading market mechanism is developed as a policy of reducing the emissions of greenhouse gases in each country. Firms are always considering whether the investment cost on emission reduction matches the benefit. One possible practice is to look for energy savings that are able to offset additional costs from the sustainability investment. This paper aims to establish such a sustainability investment decision model, which uses dynamic programming for solutions to minimize cost. The purpose is to effectively reduce emissions produced during production through investment in energy-saving, high productivity equipment and allocation of production capacity considering emissions (or so-called carbon) trading market price, greenhouse gas emission credits or caps given by the government, inventory cost, and production cost. Management-oriented implications are proposed following analysis of the results of detailed numerical examples.

Under the Kyoto Protocol's Clean Development Mechanism (CDM), countries worldwide co-operate on encountering climate change by emissions trading, which enables a win–win situation by effectively “regenerating” a cleaner environment in developing countries, whilst efforts in developed countries may still not meet their committed targets of carbon reduction. According to the CDM rules, energy efficiency improvement projects in the building sector are valid for emissions trading. Although the potential saving of energy is significant, there is only a limited number of building projects being registered as CDM projects. This paper explores the applicability of CDM in the building sector by reviewing the implementation of CDM and its advantages and disadvantages. Hong Kong was selected for an in-depth study due to its eligibility for CDM and yet non-starter status. According to a questionnaire survey supplemented by interviews with the stakeholders in this study, major hindrances such as the lack of financial incentive, inadequate knowledge about emissions trading and insufficient governmental support were found in potential CDM projects in the building sector. It is recommended that an inter-city emissions trading market covering mainland China and Hong Kong, and suitable emission reduction targets should be established and led by the government at the initial stage. By setting up an emission exchange centre, local emissions trading activities could be facilitated and job opportunities could be created. In addition to conducting emissions trading, Hong Kong may also contribute to emissions trading in the region by making use of its highly skilled professional services and efficient business environment. This study paves the way for a densely built city such as Hong Kong to benefit environmentally and economically from a cleaner region in its vicinity.

Based on the fact that Canada withdrew from the Kyoto Protocol in 2011, we study the impact of loosening environmental policies on firm performance of Canada’s oil and gas sector. This work complements the limitation of Porter hypothesis, which only discusses the relationship between environmental policy and corporate performance from the perspective of strict environmental policy. Hence, this paper adopts investment efficiency to measure corporate performance, and discusses the long-term and heterogeneous effects of loose environmental policies on Canada’s oil and gas firms. We find that environmental policy loosening is conducive to improving the investment efficiency of oil and gas enterprises, which declines annually and becomes stable at a certain level. However, the biggest beneficiaries of loose environmental policies are low-investment-efficiency firms and oil sand firms. This result suggests that environmental policy loosening can boost the performance of enterprises, but alleviate their emission reduction pressure at the same time.

In an effort to diversify economies and reduce high oil dependency, the Gulf Cooperation Council (GCC) countries plan to increase the use of renewable energy sources to meet the challenges of a post-oil future. The Accession to the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol, which require a commitment to reduce greenhouse gas emissions, has started a process of environmental awakening in the GCC countries. This paper reviews the publications on renewable energy with reference to the GCC countries since 2005. The objective was to investigate the benefits of funding and investing in renewable energy projects in the GCC countries. The article shows that the GCC countries have begun to adopt a more pro-active approach toward renewable energy that will help progress the GCC countries towards sustainability. The reorientation of strategies and policies toward renewable energy is evolving in the GCC countries.

This paper is built on a summary of the findings of a research report, entitled 'European Common Agricultural Policy: An analysis of the main factors affecting its future environmental policy', which aimed to identify and examine the main factors that could influence the development of the environmental policy of the European Union's Common Agricultural Policy (CAP) in the future. After the analysis of different factors that were recognised as being possible influences (e.g. GMOs, Montreal Protocol, Kyoto Protocol etc.) three main factors were identified that could influence policy development; these were: the World Trade Organisation and the on-going negotiations concerning the Agreement on Agriculture, and the expansion/enlargement of the European Union, the greening of the agricultural agenda, including concepts such as rural development and the increasing interest in organic farming. The conclusion reached by the research was that the World Trade Organisation has the potential to cause the biggest influence on the future environmental policy of the CAP. The issue of the enlargement of the European Union was seen as the chance for development of the industry in both the current members and the candidate countries. It was also found that the greening debate will continue to develop and influence policy in the future in combination with the other factors.

Oceangoing ships carry approximately 80% of the world's traded goods by volume, which translates into more than 10 billion tonnes in shipped traded volumes per year ( UNCTAD, 2017 ). Despite its importance, the maritime shipping sector has been traditionally overlooked in climate mitigation discussions, since this sector was largely neglected in the 1997 Kyoto Protocol. Key barriers for successful implementation of CO2 abatement measures in the sector include the lack of reliable emissions data and the inherent difficulty of attributing responsibility for international shipping emissions to the involved countries, companies and commodities, as well as the threat to global trade interests. We argue that the data paucity on maritime emissions from international trade can be addressed by linking and integrating a large wealth of data, previously used in isolation. By linking per vessel cargo composition data, individual vessel journeys from the Automatic Identification System and a bottom-up methodology to estimate emissions, using vessel specifications and details on their movements and operations, this paper describes and demonstrates this new approach for the case of Brazil's shipping manifests in 2014. We find that the maritime transportation associated with these trades is responsible for 25.99 million tonnes of CO2, an addition of 5% to Brazil's total CO2 emissions of 2014 (reported by the World Bank, currently excluding international shipping and aviation). We discuss the contribution of all traded commodities, as well as the role of the first destination ports and countries. The voyage- and commodity-specificity of this method allows us to showcase those commodities and trading routes which contribute the most towards this emissions account, in relation to those that are most valuable to Brazil's economy. We go on to discuss the implications of scaling up this methodology for global greenhouse gas abatement efforts and demand-side footprint calculations, as well as to improve accountability mechanisms for the maritime sector as a whole.