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EU Emissions Trading System

What's the verdict? Launched in January, 2005, the European Emission Trading System (EU-ETS) (1) is the largest multi-country, multi-sector emissions trading system in the world.

 

What's The Verdict with the EU Emissions Trading System  

Michael Lewis - Monday, March 29, 2010

Welcome to Enerhope
 

EU Emissions Trading System
 What's the verdict
  March 29, 2010
 
Launched in January, 2005, the European Emission Trading System (EU-ETS)

(1) is the largest multi-country, multi-sector emissions trading system in the world.
Now in its second compliance period
(2) the EU-ETS has been staunchly defended by its founders
(3) and vigorously attacked by is critics. On the positive side, European large, direct emitters are participating with enthusiasm in EU-ETS, which is lowering greenhouse gas emissions from these emitters. On the negative side, the system has been compromised by over-allocation of allowances
(4) and by administrative errors which allowed tax fraud,
(5) trading of not-properly-verified CER offsets
(6), and, most recently, re-introduction into trading of CERs which had already been retired (7). Supporters of EU-ETS insist that problems were expected during the first years of trading, and will be eliminated
(1) http://ec.europa.eu/environment/climat/emission/index_en.htm
(2) http://ec.europa.eu/environment/climat/emission/pdf/com2006_676final_en.pdf
(3) http://www.pewclimate.org/eu-ets/execsuhttp://www.wri.org/stories/2009/11/truth-about-cap-and-trade-europe
(4) http://www.pewglobalwarming.org/resources/EU-ETS.pdf
(5) http://www.foxnews.com/politics/2009/12/14/fraud-europes-cap-trade-red-flag-critics-say/
(6) http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6832259.ece
(7) http://greeninc.blogs.nytimes.com/2010/03/18/a-new-setback-for-e-u-carbon-market/

The EU-ETS will enter its third compliance period in 2013, with increasingly rigorous compliance caps, and improved administration.

What will be the future of EU-ETS? Will an efficient, fair, effective emissions trading system evolve by 2020? Will EU-ETS achieve and maintain significant emission reductions? What effect will the history of EU-ETS have on the fortunes of other greenhouse gas emissions trading systems, currently under development? Your comments would be most welcome. Tom Markowitz Enerhope.com

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