Emissions trading is attractive to two groups. One is the financial institutions and energy traders who hope to make profits from the market, either through speculation, hedging or fees. The other are carbon emitting companies that prefer market mechanisms to legislation so they have the choice of reducing their emissions or paying for carbon allowances or to offset their own emissions by paying for carbon reductions elsewhere where they are cheaper.
From 1998 increasing numbers of corporations admitted publicly that global warming was real. Whilst some continued to fund front groups to promote climate change skepticism, others focussed their public efforts on how greenhouse gases should be reduced, particularly on utilising voluntary and market-based methods such as emissions trading. BP and Shell developed internal company emissions trading programs. Others worked on developing forestry carbon sink projects.
In Australia vested interests had an undue influence on the design of the proposed emissions trading scheme, according to Professor Ross Garnaut who headed a government inquiry into what Australia should do about climate change. For example they managed to get the government to agree that 80 to 90 percent of greenhouse gas permits would initially be allocated for free, when the purpose of the scheme was to put a price on these emissions. They also managed to get the government to only agree to a goal of a 5 percent reduction in emissions by 2020 unless there was an international agreement for more at Copenhagen. In 2009 the scheme was postponed due to opposition in the Senate.
International Emissions Trading Association (IETA)was established in 1999 to promote a global market in greenhouse gas emission allowances and credits. Its membership consists of 170 'international companies' including energy companies such as BP, Shell and E.ON, banks such as Goldman Sachs and Citigroup, accounting firms such as PriceWaterhouse Coopers, automobile companies such as Chevron and Toyota, carbon trading companies and others. It has offices in Geneva, Ottawa, Brussels and Washington D.C.
The IETA sends the largest non-government delegations to UN climate talks including the 2009 Copenhagen talks when 486 IETA delegates attended. The IETA hosted 66 events at the conference.
As well as promoting emissions trading, the group wants to expand the availability of offsets to include credits from changes in land-use and agriculture or avoided deforestation that might maintain or increase the intake of carbon dioxide. However the inclusion of forest credits alone would cause the price of carbon to tumble by 75% according to Greenpeace calculations. An IETA spokesperson said this could be a good thing as it would make emissions trading more politically acceptable in the US.