The European Union Emissions Trading Scheme: should we throw the flagship out with the bathwater?

Frédéric Branger (), Oskar Lecuyer () and Philippe Quirion
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Frédéric Branger: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, AgroParisTech

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Abstract: The European Union Emissions Trading System (EU ETS), presented as the " flagship " of European climate policy, is subject to many criticisms from different stakeholders: it does not reduce carbon emissions nor generate enough low-carbon innovation, it induces competitiveness losses and carbon leakage, its distributional effects are unfair and finally, it is susceptible to fraud. We review these criticisms and recognize that: abatement is real (though small), innovation is insufficient, competitiveness losses and carbon leakage did not seem to take place, distributional effects have indeed been unfair and fraud has been important. Some of these problems could have been avoided. They can still be corrected by reforming the ETS through the introduction of price limits and by developing complementary policies, both because the ETS reform may fail and because the ETS cannot address all the relevant market failures.

Keywords: EU; ETS (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-01137875v1
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Citations: View citations in EconPapers (5)

Published in Wiley Interdisciplinary Reviews: Climate Change, 2015, 6 (1), pp.9-16. ⟨10.1002/wcc.326⟩

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Journal Article: The European Union Emissions Trading Scheme: should we throw the flagship out with the bathwater? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01137875

DOI: 10.1002/wcc.326

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