Flexible operation of the Cap-and-Trade System for the air pollutants in the Seoul Metropolitan area.

To improve the air quality in the Seoul Metropolitan area (SMA), the Korean government has implemented special measures in the 1990s. As part of these measures, the Cap-and-Trade System (CATS) was introduced and executed in July 1, 2007 for the oxides of nitrogen (NOx) and sulfur (SOx) to provide added flexibility for large sources to meet the required emission reductions. However, the trade via the SMA CATS for the air pollutants has not been active because of the limited buyers and sellers within the system as well as limited tradable species. For more flexible operation of the SMA CATS, following strategies have been suggested and their merits are discussed; (1) to link the SMA CATS with the Korea Voluntary Emission Reduction (KVER) program which is a program to manage greenhouse gases (GHGs), and (2) to extend the system, such as extension of the tradable species, participants, and introducing a project-based certification mechanism for pollutants reduction.