A carbon market is where carbon emission offsets or permit credits are bought and sold.
There are two types of carbon markets:
- Compliance market
- Voluntary market
In the compliance market, companies, governments, or other entities buy carbon offsets in order to comply with caps on the total amount of greenhouse gas (GHG) they are allowed to emit within a Cap & Trade system.
In the voluntary market, individuals, companies, or governments purchase carbon offsets to compensate for their own greenhouse gas emissions. A common example of this is for air travelers to purchase carbon offsets to compensate for the greenhouse gas emissions from their flights. Many airlines offer offsets as you purchase your tickets.
There are two main global climate exchanges:
- European Emissions Trading Scheme (“EU ETS”) – The first and largest international system for trading greenhouse gas emission allowances.
- Chicago Climate Exchange (CCX) – North America’s largest and longest running climate exchange. From 2003 through 2010 CCX operated as a comprehensive cap and trade program with an offsets component. In 2011 CCX launched the Chicago Climate Exchange Offsets Registry Program to register verified emission reductions.
- Montréal Climate Exchange (MCeX) – Canada had a climate exchange. It ceased operation in 2011.
Manitoba Green Registry
The Manitoba Government, along with Canadian Standards Association (CSA), and the Canadian Climate Exchange has created the Green Registry for buying and selling offsets. Because of CSA, users are assured that carbon offsets traded are real. Offsets are validated and verified and each tonne of carbon is serialized. Once it is sold, it is only sold once.
Right now the Manitoba Registry is voluntary. In the future, the Registry may be involved in Manitoba’s commitment to the Western Climate Initiative (WCI). WCI will require emitters of 10 KT or more to report and trade emissions. (For reference, the Health Sciences Centre generated 23 KT in 2005. See also Large Final Emitters)