The EU Emissions Trading System
Problems with the EU ETS
- Overview: What is carbon trading? (Daily Telegraph, 2011-01-30). The practice of carbon trading has been
fraught with problems.
- Emissions are not falling:
- EU emissions trading scheme on course to make tiny savings, says report , The Guardian, 2010-09-10).
- EU Emissions Trading System: failing at the third attempt (PDF, Corporate Europe Observatory, April 2011).
- However, "The European Commission ... says that despite the dash for coal
in Germany, the carbon trading scheme remains successful overall, with a
fall in CO2 emissions in 2009 of 11 per cent across the EU compared with 2008." (see Germany's coal own goal over carbon permits, New Scientist, 2011-02-24).
- Vulnerability to fraud:
- Over-allocation of allowances and giving them away for nothing:
- Perverse incentives:
- Unfair competition and leakage: EU carbon trading windfalls under fire from Lord Turner (Daily Telegraph, 2010-03-03).
- Import emissions:
- The price of allowances is far too low. The overall effect of these problems, especially over-allocation of allowances and giving them away for nothing, is that the price of allowances is still much too low.