Trading emissions and electricity – implications of the Kyoto Protocol

At present there is growing pressure to increase competition and liberalize international trade in electricity, but developed countries have also undertaken national commitments under the Kyoto Protocol to reduce their greenhouse gas emissions. Since demand for and trade in electricity is continuing to grow, commitments to reduce greenhouse gas emissions are likely to have significant repercussions in the power sector. International emissions trading can contribute to resolving this conflict, but there are implications in its use and undetermined issues which have to be addressed. Richard Baron & Jane Ellis