CO2 Emissions Trading – An Instrument for the Austrian Climate Strategy

Austria has committed itself to reducing its greenhouse gas emission by 13 percent below 1990 levels in order to meet the Kyoto targets. Incentive-based instruments, such as the trade with emission permits, could make a contribution towards achieving the overall goal of protecting the climate. Within the scope of emissions trading, players which exceed their own reduction targets can sell surplus permits and thus obtain monetary compensation. This acts as an incentive for searching cost-effective ways to reduce emission, and encouraging technical change and environmentally friendly technologies. The main framework for a national emissions trading system is formed by the structure of sectoral emissions and existing regulations such as taxes on energy.