In-house emissions certificate trading

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Emission certificates are used to control pollutant emissions from various economic areas. The trading of emissions certificates, or trading of rights, is an instrument of environmental policy , which serves in particular to reduce the emission of greenhouse gases at the lowest economic costs (see EU emissions trading and trading of emissions rights ).

However, emissions certificate trading can also be organized voluntarily at the company-internal level. In this case, the goal within a company is to reduce environmentally harmful emissions of various types as cost-effectively as possible. In-house certificate trading is an instrument of sustainability management and was tried out by individual companies before the introduction of state-organized trading systems.

requirements

In order to be able to introduce emission certificate trading into a company, it must be specified in advance how high the maximum pollutant emissions may be (e.g. CO 2 , SO 4 ). The responsible body then puts a corresponding number of certificates into circulation. At the beginning, these certificates must be distributed according to a defined key. The various departments, company divisions or locations are, for example, supplied with certificates (" grandfathering ") according to their current emissions , or the certificates are allocated to them according to benchmarks (e.g. CO 2 per kWh).

Essential instruments for the implementation of certificate trading are efficient accounting and an operational environmental information system (BUIS) to ensure that trading, distribution and compliance with the emission quotas are controlled. Furthermore, there is a need for an internal trading platform or stock exchange on which the various company departments can carry out transactions.

Strengths and potential for sustainability management

Ecologically

Trading with emission certificates requires a clear limitation of the emissions of a substance within the company. Thus, the total emission can be regulated by issuing certificates. If the goal is to reduce total emissions, there are two ways to achieve this. The company management can first remove certificates from circulation or, secondly, reduce the amount of emissions that may be emitted per certificate. The eco-effectiveness of a company can be controlled directly via emissions certificate trading .

Economically

A major advantage of emission certificates over rigid reduction targets is the reduction in emissions at the lowest possible cost. If it is cheaper for a company division to avoid emissions, it will do so and sell excess certificates. However, if avoiding emissions is more expensive than the certificates, the division will buy certificates in order to be able to emit accordingly. This results in a cost-efficient reduction in emissions and an increase in eco-efficiency .

Integrative

In-house certificate trading is a powerful approach to increasingly integrate environmentally relevant issues into management. In addition, it can also be understood as a commercial incentive that can have rationalizing effects in the company. Basically, certificate trading is easier to integrate into the existing management than rigid administrative restrictions. This is u. a. due to its self-regulating properties.

Limits and weaknesses

Emission certificate trading only makes sense from a certain company size, as a certain minimum number of emission sources is necessary between which trading can take place. Furthermore, the environmental impact must be easily measurable and documentable, otherwise efficiency and effectiveness advantages cannot be made traceable.

It can only be applied to emissions whose place of origin is irrelevant, as otherwise local accumulation or mere relocation of environmental damage may occur.

An adequate number of certificates must be issued. When it is introduced, it must not be measured on the basis of the current amount of emissions, as this would create an unwanted incentive for the corporate divisions to emit the largest possible amount of emissions in order to be allocated more certificates.

Depending on the distribution key when the certificates are introduced, the company divisions must have sufficient funds to subsequently invest either in reduction measures or the purchase of additional certificates.

Practical examples

BP Amoco - GHG (GreenHouseGas) - Emission Trading

BP was the first company in the world to decide to introduce an emissions trading system at company level. In 2000, internal emissions certificate trading began on an international level, involving 127 company units in over 100 countries. A 16-month test phase was previously carried out. According to the “cap-and-trade” principle, a reduction in emissions of 10% compared to the level of emissions from 1990 to 2010 was determined. This corresponds to a reduction of 30 million tons of CO 2 equivalent.

Each company unit is allocated a certain amount of emission rights annually, which in January 2000 corresponded to the amount of emissions in 1998 and is reduced annually in percentage terms in order to achieve the reduction target. The amount of emissions is calculated based on the CO 2 emissions of the operational and non-operational activities and only direct emissions from these activities are taken into account. CO 2 and CH 4 (methane) can be traded, with CH 4 being converted into CO 2 equivalents. The certificates (called "Allowances") correspond to one metric ton of CO 2 .

The target of a 10 percent reduction in emissions compared to 1990 was achieved in 2001. The total of direct emissions in 2000 was 83.7 million tonnes of CO 2 equivalents and had fallen to 80.5 million tonnes of equivalents by the end of 2001. In the year 2000 the trading volume was approx. 2.7 million t CO 2 equivalents and in the following year 4.55 million t CO 2 equivalents. The price per equivalent was $ 7.6 / t in 2000 and $ 36.63 / t in 2001. The decisive factor for the higher price level in 2001 was not, as one might suspect, the increased emission avoidance costs, but rather the higher targets for 2001.

Royal Dutch / Shell - Shell Tradable Emission Permit System (STEPS)

The Royal Dutch / Shell trading system was essentially a test project, which from the start was only designed for a limited period. The aim was to gain better knowledge of one's own emissions, the savings potential, the associated savings costs and knowledge of the corresponding trading systems. The STEPS program was introduced in 2000 with the aim of reducing emissions by more than 10% of 1990 levels by 2002. It was also planned to continue the implemented measures in order to meet the requirements of the Kyoto Protocol by 2010. The STEPS program was (as with BP Amoco) a “cap and trade” system, within which CO 2 and CH 4 (as CO 2 equivalent) were traded. In a period of around 2 years, around 19 million t CO 2 were traded at an average price of US $ 5 / t. The project ended on December 31, 2002. Based on its experience, Shell actively participated in the introduction of the UK Emission Trading Scheme (ETS).

Otto shipping

The world's largest mail order group, Otto-Versand , had already devoted itself to environmental protection as a corporate goal in 1986, introduced an environmental management system in 1997 and decided to use an emissions trading system to reduce transport- related emissions in particular. The Otto Group has 2007 by adopting a climate protection strategy, a reduction of 50% of their transportable, mobility and location-based CO 2 set emissions by 2020 goal. In this context, a simulation of internal emissions certificate trading in the Otto Group was carried out for the period 2003-2007. For the service sector it can be stated that the specific emissions are relatively low, do not have to comply with an operating license or limit values ​​and that an accounting has so far been carried out within the framework of environmental management systems . For a service company such as Otto-Versand, it must therefore be assessed critically whether a functioning market with sufficient market volume (emissions), liquidity, market participants and significantly different marginal costs for avoiding emissions can be created.

literature

  • R. Betz, B. Geoök, K. Rogge, J. Schleich: Flexible instruments in climate protection. Emissions trading, Clean Development Mechanism, Joint Implementation. A guide for companies. Fraunhofer Institute for System Technology and Innovation Research. Karlsruhe 2005. (Fraunhofer-Publica)
  • R. Betz, J. Schleich, C. Wartmann: Flexible instruments in climate protection. A guide for companies. Fraunhofer Institute for System Technology and Innovation Research, Karlsruhe 2003.
  • J. Hörisch: Combating climate change through organizational innovation. An empirical analysis of internal emission trading schemes. In: Corporate Governance. 13 (5), 2013, pp. 569-582.
  • R. Kosobud: Emissions Trading. Wiley, New York 2000, ISBN 0-471-35504-6 .
  • S. Sorrell, J. Skea (Eds.): Pollution for sale: Emissions trading and Joint Implemantation. Elgar, Cheltenham 1999.
  • T. Tietenberg: Transferable Discharge Permits and the Control of Air Pollution. A Survey and Synthesis. In: Journal for Environmental Policy and Environmental Law. 1980.
  • S. Trautwein: Opportunities and problems of in-house CO2 certificate trading - using the example of Otto Versand Hamburg. Center for Sustainability Management (CSM), Lüneburg 2002, ISBN 3-935630-23-9 . (CSM Lueneburg)

Web links

Individual evidence

  1. ↑ Federal Environment Ministry (BMU); econsense (ed.); S. Schaltegger, C. Herzig, O. Kleiber, T. Klinke, J. Müller: Sustainability management in companies. From the idea to practice: management approaches to implement corporate social responsibility and corporate sustainability. 3. Edition. BMU, econsense, Center for Sustainability Management, Berlin / Lüneburg 2007, ISBN 978-3-935630-60-3 , p. 121.
  2. ↑ Federal Environment Ministry (BMU); econsense (ed.); S. Schaltegger, C. Herzig, O. Kleiber, T. Klinke, J. Müller: Sustainability management in companies. From the idea to practice: management approaches to implement corporate social responsibility and corporate sustainability. 3. Edition. BMU, econsense, Center for Sustainability Management, Berlin / Lüneburg 2007, p. 122.
  3. ↑ S. Trautwein: Opportunities and problems of in-house CO 2 certificate trading - using the example of Otto Versand Hamburg. Center for Sustainability Management (CSM), Lüneburg 2002, p. 42.
  4. ↑ Internal Emissions Trading. ( Memento of July 21, 2008 in the Internet Archive ) at: environment.gov.au
  5. ↑ R. Betz, J. Schleich, C. Wartmann: Flexible instruments in climate protection. A guide for companies. Fraunhofer Institute for System Technology and Innovation Research, Karlsruhe 2003, p. 80.
  6. ↑ R. Betz, J. Schleich, C. Wartmann: Flexible instruments in climate protection. A guide for companies. Fraunhofer Institute for System Technology and Innovation Research, Karlsruhe 2003, p. 81.
  7. ↑ S. Trautwein: Opportunities and problems of in-house CO2 certificate trading - using the example of Otto Versand Hamburg. Center for Sustainability Management (CSM), Lüneburg 2002, pp. 83, 104.