<p>There can be civil or criminal penalties applied for non-compliance.</p>

<p>See for example:
<a href="https://www.gov.uk/government/publications/environment-agency-enforcement-and-sanctions-policy/annex-2-climate-change-schemes-the-environment-agencys-approach-to-applying-civil-penalties" rel="nofollow noreferrer">https://www.gov.uk/government/publications/environment-agency-enforcement-and-sanctions-policy/annex-2-climate-change-schemes-the-environment-agencys-approach-to-applying-civil-penalties</a></p>

<p><a href="https://www.daera-ni.gov.uk/articles/euets-fees-charges-and-civil-penalties" rel="nofollow noreferrer">https://www.daera-ni.gov.uk/articles/euets-fees-charges-and-civil-penalties</a></p>

<p>International trading schemes depend on international law. Membership of such schemes will depend on accepting an adjudication body to rule on breaches, as with any other international contractual agreement.</p>

CC BY-SA 4.0
2019-05-14T13:40:29.200Z
That mean  certificates may only between traded between countries that signed the same trading scheme?
Hans-Peter Stricker
CC BY-SA 4.0
2019-05-14T13:43:51.820Z
Pretty much, though it can be a two-tier trading scheme, with one tier for internal trading between member nations, and a second tier covering cross-border trade between any member nation and a non-member nation.
410 gone
CC BY-SA 4.0
2019-05-15T07:46:46.150Z
How does the second tier work? Does it say with which non-member nations their may be trading? Or what?
Hans-Peter Stricker
CC BY-SA 4.0
2019-05-15T07:48:15.623Z
Is there a list of countries with which no EU country (i.e. its companies) may trade emission rights?
Hans-Peter Stricker
CC BY-SA 4.0
2019-05-14T13:38:05.343Z
2019-05-14T13:38:05.343Z
410 gone
<p>As far as I have understood <a href="https://www.wikiwand.com/en/Emissions_trading" rel="nofollow noreferrer">emission right certificates</a> are some kind of currency. Each company may emit as much of say CO<sub>2</sub> as its certificates allow. Certificates may be traded, i.e. bought and sold. If a company emits more than it is allowed to it pays a fine (to the country where the pollution occurs).</p>

<p>My question is: How is it prevented that a wealthy company in a rich country buys lots of certificates (to a modest price) from a poorer company in a poorer country which in turn is forced to emit more pollutants than it is allowed to (because it sold all its certificates) - but its country doesn't force it to pay the fine.</p>

<p>Thus the intended effect of emission right certificates would be undermined. By which measures is this tried to be avoided?</p>

<macroeconomics><international-trade><environmental-economics>
International emissions trading
Hans-Peter Stricker
# International emissions trading

(Asked by: username_0 on 2019-05-14)

As far as I have understood [emission right certificates](https://www.wikiwand.com/en/Emissions_trading) are some kind of currency. Each company may emit as much of say CO2 as its certificates allow. Certificates may be traded, i.e. bought and sold. If a company emits more than it is allowed to it pays a fine (to the country where the pollution occurs).

My question is: How is it prevented that a wealthy company in a rich country buys lots of certificates (to a modest price) from a poorer company in a poorer country which in turn is forced to emit more pollutants than it is allowed to (because it sold all its certificates) - but its country doesn't force it to pay the fine.

Thus the intended effect of emission right certificates would be undermined. By which measures is this tried to be avoided?

**Tags:** macroeconomics, international-trade, environmental-economics

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## 1 answers

### Answer by username_1 on 2019-05-14. Score: 4 | Accepted answer

There can be civil or criminal penalties applied for non-compliance.

See for example:
<https://www.gov.uk/government/publications/environment-agency-enforcement-and-sanctions-policy/annex-2-climate-change-schemes-the-environment-agencys-approach-to-applying-civil-penalties>

<https://www.daera-ni.gov.uk/articles/euets-fees-charges-and-civil-penalties>

International trading schemes depend on international law. Membership of such schemes will depend on accepting an adjudication body to rule on breaches, as with any other international contractual agreement.

> **Comments:**
> **username_0**: That mean  certificates may only between traded between countries that signed the same trading scheme?  
> **username_1**: Pretty much, though it can be a two-tier trading scheme, with one tier for internal trading between member nations, and a second tier covering cross-border trade between any member nation and a non-member nation.  
> **username_0**: How does the second tier work? Does it say with which non-member nations their may be trading? Or what?  
> **username_0**: Is there a list of countries with which no EU country (i.e. its companies) may trade emission rights?  

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