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Business interruption: Emissions trading - Working for the green trade.
(From Post Magazine)
Carbon is now in the mainstream press almost every day. And carbon legislation has changed the way business is done, making it part of every business interruption insurance claim.
The implementation of legislation that limits carbon emissions at every one of the 12,000 carbon-emitting installations in the European Union is already having a significant impact, not a theoretical one. But some background is necessary before the practical claims handling and underwriting consequences of this legislation for BI insurance can be discussed.
The Kyoto Protocol, signed by virtually every member of the United Nations, aims to reduce greenhouse gas emissions, primarily carbon dioxide, to pre-1990 levels. The EU Emissions Trading Scheme is the EU's statutory enactment of its Kyoto obligations to reduce carbon emissions and is intended to provide a financial stick and carrot for a greener, cleaner industry. Carbon-emitting installations in the EU are financially obliged to reduce their emissions and incentives promote investment in green technologies both in the EU and in developing economies.
Carbon credit allocation
Under the ETS, each member state applied for, and was then allocated, a limited number of carbon credits. One carbon credit is the equivalent of one tonne of carbon dioxide. After detailed monitoring of emissions and applications, installations in each state were allocated - at no cost - a limited number of carbon credits that they are permitted to burn.
The ETS is broken down into two phases. Phase one covers 2005 to 2007, while phase two coincides with Kyoto and covers 2008 to 2012. The first phase is a mandatory pre-Kyoto trial period for the EU, and carbon credits for it were allocated and then split annually. Installations must declare their carbon use on an annual basis and are generally permitted to carry over carbon credits between years during this phase. Carbon allocations for phase two remain a topic of debate.
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- Press release article from: M2 Presswire October 20, 2008 700+ words
...Rejection Of Forest Carbon Credits In ETS(C)1994-2008...to exclude forest carbon credits from the EU emissions trading scheme (ETS) until at least after...inclusion of forest carbon credits in the ETS would lead to serious...
- POLITICS WEEK; Main parties eye ETS accord
- Newspaper article from: The Nelson Mail September 7, 2009 700+ words
...committee reviewed it. The ETS isn't something that has...probably a dangerous extent, an ETS imposes a cap on greenhouse...their limits would have to buy carbon credits from those under their caps. That is how the ETS passed by Parliament works...
- Taking Off? The Inclusion Of Aviation In The EU ETS.
- News wire article from: Mondaq Business Briefing April 21, 2009 700+ words
...the Kyoto Protocol. Carbon credits (certified emission...legislation to set up the EU ETS is Directive 2003/87...these Directives. The EU ETS is currently in its second...ndash;2007. The EU ETS covers large entities...cap (represented by carbon credits called EU Allowances...
- Leaders spar over changes to ETS; EMISSIONS LEGISLATION
- Newspaper article from: The Press ESPINER Colin September 16, 2009 700+ words
...new emissions trading scheme (ETS) will cost the Crown an estimated...changes it has made to Labour's ETS and denying claims that it has...Crown would make from Labour's ETS over the next 20 years by selling carbon credits on the world market. The Treasury...
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- News wire article from: AsiaPulse News July 3, 2008 700+ words
...an emissions trading scheme (ETS) if it is to be effective in...said. Estimates suggest an ETS is likely to add another 10...though the cost of purchasing carbon credits would fall to business in the...admitted introducing a national ETS would be difficult. "Given...
- FED: Liberal MPs say many colleagues will vote against ETS=3
- Newspaper article from: AAP General News (Australia) November 16, 2009 700+ words
...colleagues will vote against ETS=3 Opposition frontbencher...Indonesia would be able to claim carbon credits. "That kind of nonsense is...reconsider their opposition to an ETS if more sectorssuch as cement...Nationals wouldnot commit to any ETS if the rest of the world did...
- EU carbon market: volatility the only certainty; EU carbon credits fell over...
- Press release article from: M2 Presswire May 11, 2006 700+ words
...the only certainty; EU carbon credits fell over 60% after...Carbon price collapse EU carbon credits collapsed from record...Emissions Trading Scheme [ETS] is the key mechanism...price volatility in the ETS witnessed in April 2006...
- United KIngdom: Sandbag bagging carbon credits.
- News wire article from: TendersInfo August 6, 2009 700+ words
...donations to buy up EU carbon credits and cancel them in an...drive up the price of carbon credits in the marketplace...000 tonnes worth of carbon credits. It's the equivalent...Trading System (EU-ETS), the EU's current...
