Transfers of Kyoto units in the Swiss Emissions Trading Registry : a network analysis from 2007-2014

Abstract

The Swiss emissions trading registry was opened in 2007 and since then companies – including foreign companies - or private persons were able to open an account and transfer units. Such an account enabled to hold and transfer different types of units issued from different jurisdictions including units based on the Kyoto Protocol or emission allowances (CHUs) generated by the Swiss government for compliance under the Swiss Emissions Trading System. The majority of transferred units in the Swiss registry were Kyoto units of the following type: 1) Certified Emissions Reductions (CERs), issued according to the rules of the Clean Development Mechanism (Article 12 des Kyoto-Protocol) and Emission Reduction Units (ERUs), issued according to the rules of Joint Implementation under Article 6 of the Kyoto Protocol.The aim of this paper is to analyse the transfer flows of both national and international emissions allowances and international emission credits between different accounts in order to gain a picture of Switzerland's role in international emissions trading. We use network analysis to analyse the Swiss registry transfer data from 2007 to 2014. The analysis shows that, contrary to widespread belief, the transfer volume through the Swiss registry was substantial. Although transfers in Swiss emission allowances (CHUs) are negligible, the volumes of CERs and ERUs transferred via the Swiss registry are considerable. According to World Bank estimates the total trading volume of CERs in 2008 amounted to 1 billion, of which approximately 400 million transactions were recorded in the Swiss Registry. The type of actors in both submarkets vary considerably. The market of ERUs is dominated by commodity traders buying large volumes from Russia and the Ukraine, the CER market involves more players from different sectors and is less concentrated.