Why would a company engage in emission trading?
An entity would participate in emissions trading for three reasons – to gain emissions credits to meet its targets, to sell credits, or it to retire credits from the market. Participation in emissions trading can demonstrate corporate leadership on an issue of global concern, help entities gain experience in an emerging scheme, and position an entity to understand and potentially influence future regulations or new programs. Operationally and strategically, participation in emissions trading has several additional benefits including: the generation of revenue on achievements that previously had no economic value; hedging risk against future GHG restrictions; and informing public policy with knowledge and credibility gained through experience in the market.
