South Korea Opens World’s Second-Largest Carbon Market
South Korea opened the world’s second-largest carbon trading market when its cap-and-trade system took effect earlier this week.
Approved by legislators in 2012, the system “will cap the emissions of 525 of the biggest companies in the country,” Climate Progress reports. “Overall, South Korea has capped its 2015 to 2017 country-wide emissions at 1.687 million metric tons of carbon dioxide equivalent.”
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Reuters analysts predict that carbon permits will initially sell for less than $10 per tonne and increase to about $30 by 2017.
“We expect modest volumes initially, probably for the first six months, partly because the mechanism is new and relatively unfamiliar for the participants, partly because we think many Korean industrials will avoid acting in a manner that would give their competitors any indications on their growth rate,” said Anders Nordeng, senior analyst with Thomson Reuters Point Carbon.