The EU’s Emissions Trading Scheme Has Been Voted Down
Summary . The European Union instituted its Emissions Trading Scheme, using a cap and trade mechanism, in 2005. Since that time, the Scheme has gone through periods in which the number of allowances was too high, resulting in excessively low values for their price. In a vote on April 16, 2013 the European Parliament defeated a proposed measure continuing to allot allowances to the emissions sources among the EU’s member nations, largely for economic reasons. If allotments are not revived, the ETS will cease operations. This would terminate one of the first multinational efforts to mitigate greenhouse gas emissions. The ETS exemplifies the administrative and political difficulties facing cap and trade regimes. Valuing carbon emissions is better achieved with a carbon fee. Introduction . The original members of the European Union (EU) in 1997 acceded to the Kyoto Protocol, an international treaty to limit emissions of c...

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