This paper proposes a model of dynamic behavior of CO2 allowance spot prices and related firms' abatement activities. Recently, Emission Trading Schemes (ETS) have been recognized worldwide as one of the most effective methods to reduce greenhouse gases with minimum social cost. So a reliable CO2 pricing model would be required by policy makers and related firms to assess its effect on productive and financial activities. The current paper proposes a tractable model of CO2 allowance spot prices along the line of Seifert et al. (2008). Especially, when abatement cost is represented by exponential function and penalty of excess emission is sufficiently large relative to marginal abatement cost, analytical solution of CO2 spot prices is derived. Then dynamic behavior of representative firm and its expected cost to abide Kyoto protocol are simulated in Japanese case.