The evolution of emissions trading in the EU: tensions between national trading schemes and the proposed EU Directive

Sorrell, Steven, Boemare, C and Quirion, P (2003) The evolution of emissions trading in the EU: tensions between national trading schemes and the proposed EU Directive. Climate Policy, 3 (2). S105-S124. ISSN 1469-3062

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Abstract

The EU is pioneering the development of greenhouse gas emissions trading, but there is a tension between the ‘top-down’ and ‘bottom-up’ evolution of trading schemes. While the Commission is introducing a European emissions trading scheme (EU ETS) in 2005, several member states have already introduced negotiated agreements that include trading arrangements. Typically, these national schemes have a wider scope than the proposed EU directive and allow firms to use relative rather than absolute targets. The coexistence of ‘top-down’ and ‘bottom-up’ trading schemes may create some complex problems of policy interaction. This paper explores the potential interactions between the EU ETS and the negotiated agreements in France and UK and uses these to illustrate some important generic issues. The paper first describes the proposed EU directive, outlines the UK and French policies and compares their main features to the EU ETS. It then discusses how the national and European policies may interact in practice. Four issues are highlighted, namely, double regulation, double counting of emission reductions, equivalence of effort and linking trading schemes. The paper concludes with some recommendations for the future development of UK and French climate policy.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > SPRU - Science Policy Research Unit
Depositing User: Steven Sorrell
Date Deposited: 06 Feb 2012 19:50
Last Modified: 03 Apr 2012 09:08
URI: http://sro.sussex.ac.uk/id/eprint/22506
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