By Timothy Cama - 01/12/15 08:36 AM EST
South Korea opened its carbon dioxide cap-and-trade system Monday, limiting carbon emissions from the country’s largest companies.
The market covers 525 companies and is the second largest in the world, behind Europe’s system, Reuters reported.
As a whole, the companies have been given a fixed amount of greenhouse emissions to use over the next three years, 1.687 million metric tons of carbon dioxide equivalent. Any company wishing to exceed its allotment must buy credits from another firm.
The country’s goal is cut its pollution of greenhouse gases, believe to cause climate change, 30 percent by 2020, with the carbon market as a main piece of its strategy.
The first carbon trading under the system Monday went for 7,860 won, or $7.26, per metric ton, and increased to 8,640 won, or $7.97, Reuters reported. That price is close to the cost in Europe’s trading system.
Thomson Reuters Point Carbon predicted that prices would rise to $30 per metric ton by 2017, Reuters said.