EU uses Sale of Carbon Permits to Advance Clean Energy Economy

In January 2005 the European Union Greenhouse Gas Emission Trading System (EU ETS) commenced operations as the largest Greenhouse Gas Emission Trading System in the world.

Under the EU ETS, large emitters of carbon dioxide must now monitor and annually report their CO2 emissions to the government. The EU ETS then sets a level or cap on the amount of a pollutant that can be emitted by a firm and the firm then receives or is sold emissions permits. Firms that need to increase their emission permits beyond those allocated by the EU ETS may buy permits from businesses that require fewer permits.

Government profits from the sale of permits is providing large start-up capital for projects in such areas as solar power, wind power and “carbon capture and storage,” the process by which greenhouse gases from power stations are pumped underground.

At current market prices, the sale of permits is expected to raise 4.5 billion Euros (6.3 billion dollars) for the development of the clean energy economy. National governments and private businesses are expected to match the EU funding bringing the total expected financing to 9 billion Euros.

The new fund will help ensure that Europe continues to lead the green revolution.

To lean more read EU Launches 4.5bn Clean Energy Fund

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