10 terms

KYOTO PROTOCOL CH 4

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What was the Kyoto Protocol the first to do?
It was the first international agreement based on the creation of a new global market, a market for trading rights to use the planet's atmosphere.
When did the Carbon Market enter international law? What was it ready to become?
2005. It was ready to become the largest commodity market in the world.
What is one of the carbon market's unique properties?
It is based on the trade of a GLOBAL PUBLIC GOOD (there is a global carbon concentration reduction). Equity and efficiency are tied, whre it can unite the interests of rich and poor (businesses vs environmentalists).
What was controversial about the carbon market?
Each trader has emission limits. Over emitters buy rights from those who under emit and penalizes the bad guys and compensates the good guys with minimal government intervention.

It uses Adam Smith's "invisible hand"- the market to join interests and buisiness sector with sector with social interests.
What is the purpose of caps on industrial nations' emissions
to guarantee that global emissions will not exceed levels that could risk catastrophic climate change.
Explain what is going on with the ratification of the Kyoto Protocol?
It requires that the nations that signed the protocol in 1997, ratify the Protocol and obey the emissions limits accordingly. Almost all the industrial nations have ratified it, with Australia finally joining in 2007. However, USA has not ratified yet, but agreed in 07 to arrive at a solution by end of 09.
Why is it so important that US ratify the Kyoto Protocol?
US is the largest emitter in the world.
What are some fears of the carbon markets for business leaders?
Increased costs of doing business especially for electricity and commodity producers (they are central to economy but generate huge carbon emissions).

Also fear about the volatility of carbon prices when they begin trading in their own nations.

Carbon prices would increase commodity prices and business costs.
The price increases for business leaders real? But What is the counterargument?
Yes. these concerns are real, but so is climate change and the extraction of resources from the ecosystem!

Yet the potential gains are HUGE! The largest investors are betting a large percentage of risk capital to renewable energy sector. It is the fastest growing area of business in the world today.
Why are business opinions so polarized? How are they looking at this?
They are looking through different lens': the before lens and after lens.