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Comments
Commenters1
If a participant believes that they are holding more allowances than they require, they can choose to sell them in the secondary market. In cap and trade schemes, active use of the secondary market helps to ensure that abatement is achieved cost effectively. If an organisation can reduce its emissions by a tonne of carbon dioxide at a lower cost than the market price of an allowance, then it is likely that it will sell its surplus allowance(s) to organisations facing a higher cost of abatement. Consequently emissions reductions will tend to take place cost-effectively across the scheme participants as a whole.
If a participant believes that they are holding more allowances than they require, they can choose to sell them in the secondary market. In cap and trade schemes, active use of the secondary market helps to ensure that abatement is achieved cost effectively. If an organisation can reduce its emissions by a tonne of carbon dioxide at a lower cost than the market price of an allowance, then it is likely that it will sell its surplus allowance(s) to organisations facing a higher cost of abatement. Consequently emissions reductions will tend to take place cost-effectively across the scheme participants as a whole.2
Any organisation, not just CRC participants, will be able to open an online account with the Administrators in order to hold and trade allowances on the secondary market, at any time during the scheme. This will improve the liquidity of the secondary market as specialist brokers and traders are able to facilitate trading between participants. Government does not propose to introduce absolute limits on the number of allowances that any one organisation can hold. As part of the registry system Government will implement a notice board facility to help participants find buyers or sellers of allowances. However, organisations will not be restricted to using this system to find buyers and sellers of allowances and Government expects that third parties may implement external trading platforms for CRC allowances.
Any organisation, not just CRC participants, will be able to open an online account with the Administrators in order to hold and trade allowances on the secondary market, at any time during the scheme. This will improve the liquidity of the secondary market as specialist brokers and traders are able to facilitate trading between participants. Government does not propose to introduce absolute limits on the number of allowances that any one organisation can hold. As part of the registry system Government will implement a notice board facility to help participants find buyers or sellers of allowances. However, organisations will not be restricted to using this system to find buyers and sellers of allowances and Government expects that third parties may implement external trading platforms for CRC allowances.Tags: online account