Companies may buy or sell permits to allow them to cover their actual level of emissions. The ETG was set up less than a year ago with about 30 companies. Unlike schemes in Norway and Denmark, which focus on a limited number of companies, the UK's ETG wants to attract as many members as possible. The 1997 Kyoto Protocol is part of the United Nations Framework Convention on Climate Change, the world's only agreement to combat global climate change. It commits 39 advanced industrialized states to cut emissions of fossil fuel gases by an average of 5.2 percent of 1990 levels by the period 2008-2012.
Industry argues that emissions trading makes economic and environmental sense.
The UK must accomplish a 12.5 percent reduction of six gases between 2008 and 2012 as against a 1990 baseline emissions figure. Critics claim that emissions trading is simply trading the right to pollute. Industry argues that if emissions trading helps achieve lower output of greenhouse gases, then the ends justify the means. Work on the development of emissions trading in the UK has started. Trading is expected to get under way next year with targets adopted from 2002 onward.