UK emissions trading from 2002–2004: corporate responses

Abstract

The UK was the first country to implement emissions trading as a policy instrument to reduce greenhouse gas emissions across the whole of the economy. The paper therefore commences with a description of the UK Emissions Trading Scheme and then continues with a discussion of incentives for UK companies to engage in emissions trading. It then outlines a case for research of companies' experiences of "direct participation" in the Scheme, and presents results obtained from case studies of a set of companies which are "direct participants". These illustrate the impact of emissions trading on income generation as well as cost savings. The paper then concludes with the observation that emissions trading will take on increased importance with the introduction of the EU Emissions Trading Scheme and the implementation of the Kyoto Protocol in 2005, and that further research is therefore required into energy and carbon costs and their possible influences on facilities location.