The Challenges of GHG Emission Trading for Lithuania
The Challenges of GHG Emission Trading for Lithuania

Summary/Abstract: The article deals with the issues related to the implementation of EU emission trading scheme in Lithuania. The main objectives of the article are to analyse the main features and requirements of EU emission trading scheme and to assess the impact of GHG emission trading on economy through the energy price increase caused by carbon restrictions on energy sector. The aim of EU Emission trading scheme is to help member states to fulfil their Kyoto commitments at lowest costs. In Lithuania GHG emissions in 2004 amounted to 20.2 mill. t and were by 2.5 time lower Lithuania’s Kyoto commitments. The total number of allowances allocated for Lithuanian emission trading sector in both emissiontrading periods was not imposed by Kyoto commitments. The main constraint for 2005-2007 is laid in Annex II criteria – not to allocate more allowances than it will be needed. The quantity of allowances member state may issue was governed by 11 common allocation criteria. While the directive does not explicitly prescribe a given number of allowances, each member state must respect the criteria, which mean that in practice their leeway is limited. The general concern of EC is that if too many allowances were issued there would be no scarcity, and no market develops.

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