Korea to Start Carbon Credit Exchange Next Year

With climate change becoming a global issue, Korea is planning to set up its own carbon exchange as early as next year. The Korea Exchange (KRX) said Wednesday that it has launched a preparation team to establish a carbon exchange where businesses can trade in credits for carbon dioxide and other greenhouse gases. The idea has its roots in the Kyoto Protocol, the international treaty to prevent climate change, which requires countries that exceed their limit for greenhouse gas emissions to buy emissions credits from other nations that haven't reached their limits. Korea isn't on the Kyoto Protocol list of countries obliged to reduce their greenhouse gas emissions, but it will almost certainly be in 2013. "The government will set the limit for greenhouse gas emissions for businesses, which can then sell carbon credits they have or buy ones they need on the exchange," the KRX said. "Financial institutions will also be able to engage in futures trading based on carbon credits.” Like a stock exchange, the carbon exchange will introduce price limits, clearance and settlement systems.