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The European Union's Emissions Trading System: Climate Policymaking Model, or Muddle? (Part 1)

Wil Burns's picture
Visiting Professor, Environmental Policy & Culture Program, Northwestern University

Dr. Wil Burns is a Visiting Professor in the Environmental Policy & Culture Program at Northwestern University. Prior to this, he was the Founding Co-Director of the Institute for Carbon...

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  • Sep 4, 2020

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This article critiques the European Union's Emissions Trading System, including recent reforms.

Mark Silverstone's picture
Mark Silverstone on Sep 8, 2020

Thanks for posting this.  The EU Emissions Trading System may be the only large scale real world attempt at, what is by any other name, a carbon tax, though far more complex than that.  Part I is a comprehensive review of the System´s history.   I think it is fair to say that the System failed to impact carbon emissions in  many of the ways it was meant to do.  I do think it has had an effect, along with other government policies, of reducing carbon emissions by individual consumers.  After all, the direct tax has made gas and diesel more expensive.  But for the most part it has failed to impact the bigger power consuming industries from going about business as usual.   Other policies, however, such as commitments under the Kyoto protocol have had that very effect to some extent, and continue to do so.  I look forward to reading Part II to get a better idea on whether the system can be made to work as planned, as a real driver to emissions reductions. 

In a way, it may be a good thing that the period 2006-2013 was a learning phase for the System.  In addition to lack of detailed knowledge of the actual sources and quantities of emissions, no one really knew what technologies could be made available to reduce emissions, other than simply doing without the benefits of those emissions, e.g. steel products, energy for homes and small industries, etc.   CCS seems to have come and gone and may yet come again.  The nuclear industry has certainly not evolved in a way that once seemed promising, though it may yet. Renewables have evolved enormously to the point at which, some say, they can replace massive coal and even gas and oil burning.  For any cap and trade system to succeed, it must not only discourage fossil fuel burning, it needs to spur efforts to replace it.  

I look forward to seeing what the next report says.

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