articleReview of Environmental Economics and PolicyJan 1, 2007Closed access

The European Union Emissions Trading Scheme: Origins, Allocation, and Early Results

Massachusetts Institute of Technology · Agence internationale de l'énergie · +1 more institution

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Abstract

The European Union Emissions Trading Scheme (EU ETS) is the world's first large experiment with an emissions trading system for carbon dioxide (CO2) and it is likely to be copied by others if there is to be a global regime for limiting greenhouse gas emissions. After providing a brief discussion of the origins of the EU ETS, its relation to the Kyoto Protocol, and its precedents in Europe and the U.S., this paper focuses on allowance allocation—the process of deciding who will receive the newly limited rights to emit CO2. We describe how allowances were allocated in the EU ETS, with particular emphasis on the issues and problems encountered, including the lack of readily available installation-level data, the…

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Topics & keywords

Keywords
  • Emissions trading
  • Kyoto Protocol
  • Allowance (engineering)
  • Greenhouse gas
  • European union
  • Clean Development Mechanism
  • Benchmarking
  • Process (computing)
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