— Overview
An emissions allowance is a right to emit within a cap; a credit is a certified reduction from a project. Allowance markets allocate rights under a cap; credit markets issue rights for reductions achieved outside the capped facilities. Korea introduced a greenhouse-gas emissions trading scheme in 2015. Allowances were mostly free at first, with the paid share later increased. Energy, steel and chemicals have been the main participants.
Prices had risen sharply in the years leading up to the writing, raising firms' costs and the pressure to rethink the scheme — that rise is not given here as a current official price. A 2050 carbon-neutrality scenario is discussed alongside a shift toward renewable supply and cleaner vehicles. Global market-size figures — about 10.9 billion dollars in 2005 and 143.7 billion in 2009, after the Kyoto Protocol took effect — are of those years, not of today's market.
The EU was first with a cap-and-trade system: Directive 2003/87/EC, in force from January 2005, with a first period 2005–2007 and a second 2008–2012, starting with carbon dioxide at large installations and a later rise in paid allocation. Germany enacted a greenhouse-gas emissions trading act (TEHG) in 2004 and runs the scheme as part of the EU ETS, with DEHSt under the Federal Environment Agency. Britain began plant-to-plant trading in 1996 and a voluntary ETS in 2002, with 866 firms and 35 brokers in the first year; unused allowances could be banked into the Kyoto first commitment period, 2008–2012.
The United States used cap-and-trade for sulphur dioxide under the 1990 Clean Air Act acid-rain program (phase 1, 1995–1999; phase 2 from 2000), and California's greenhouse-gas program began in 2012. Japan has run a voluntary scheme since 2005 toward a 6 percent Kyoto target, with industry associations setting and publishing sector goals. An older Korean trading arrangement is also taken up under the Special Act on Metropolitan Air Quality Improvement and the Framework Act on Low Carbon, Green Growth, limited to certain workplaces in the capital region and to nitrogen oxides, sulphur oxides and dust — not carbon dioxide.
That limited air-pollutant scheme should not be confused with the 2015 greenhouse-gas ETS.
— Contents and key concepts
Allowances, credits, and Korea's 2015 scheme
An emissions allowance is a right to emit within a cap; a credit is a certified reduction from a project. Allowance markets allocate rights under a cap; credit markets issue rights for reductions achieved outside the capped facilities. Korea introduced a greenhouse-gas emissions trading scheme in 2015. Allowances were mostly free at first, with the paid share later increased. Energy, steel and chemicals have been the main participants.
Prices had risen sharply in the years leading up to the writing, raising firms' costs — that rise is not given here as a current official price. Global market-size figures, about 10.9 billion dollars in 2005 and 143.7 billion in 2009, belong to those years, not to today's market.
The EU and others, and an older Korean air scheme
The EU was first with a cap-and-trade system: Directive 2003/87/EC, in force from January 2005, with periods 2005–2007 and 2008–2012, starting with carbon dioxide at large installations. Germany enacted TEHG in 2004 and runs the scheme as part of the EU ETS. Britain began plant-to-plant trading in 1996 and a voluntary ETS in 2002. The United States used cap-and-trade for sulphur dioxide under the 1990 acid-rain program, and California's greenhouse-gas program began in 2012. Japan has run a voluntary scheme since 2005.
An older Korean trading arrangement is also taken up under the Special Act on Metropolitan Air Quality Improvement, limited to certain workplaces in the capital region and to nitrogen oxides, sulphur oxides and dust — not carbon dioxide. That limited air-pollutant scheme should not be confused with the 2015 greenhouse-gas ETS. The same Korean report, at fuller length, is on CampusDown.
Sources
- Korea's greenhouse-gas emissions trading scheme, introduced 2015. Global market-size figures in the source for 2005 (about 10.9 billion dollars) and 2009 (143.7 billion). EU ETS: Directive 2003/87/EC, in force January 2005. Germany TEHG 2004 and DEHSt. Britain: plant-to-plant trading 1996, voluntary ETS 2002. United States: 1990 CAA acid-rain program; California 2012. Japan: voluntary scheme from 2005 toward a 6 percent Kyoto target, as that account has it. Older Korean capital-region air-pollutant trading (NOx, SOx, dust) distinguished from the 2015 GHG ETS.
Last updated: 14 November 2026
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