Note d’étude Mission Climat

Research report no. 3, 20 June 2005 Romain Frémont +33 (0)1 58 50 79 52 romain.frémont@caissedesdepots.fr CO emissions exchanges and the 2functioning of trading systems The various CO emissions exchanges in Europe 2 Nord Pool ECX EEX Climex Powernext EXAA Sendeco2 CO emissions trading first began at the end of the 1990s, as awareness of the 2challenges posed by climate change grew. Prior to 2005, these transactions occurred over the counter, with no organised market system. The launch of the European emissions trading scheme has changed everything. The market’s scale has grown exponentially, with a total volume of more than 2 billion metric tonnes in emissions allowances allocated to industry. The launch of several emissions trading exchanges is therefore designed to provide liquidity and organise the market. This report looks at the six proposed exchanges as at mid-2005 and the conditions for their success. 1I. The overall challenges for exchanges With the entry into force of European Directive 87/2003, the first international CO emissions allowances trading scheme was launched on 1 January 2005 in the 2EU-25. This scheme enables various participants to trade emissions allowances based on their needs, which should minimise the overall cost of the effort to fight climate change. Beginning in 2008, it will be integrated into the larger system established by the Kyoto protocol. The ...