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


  • Catherine Boemare
  • Philippe Quirion
  • Steve Sorrell


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.© 2003 Elsevier Ltd. All rights reserved.

Suggested Citation

  • Catherine Boemare & Philippe Quirion & Steve Sorrell, 2003. "The evolution of emissions trading in the EU: tensions between national trading schemes and the proposed EU directive," Climate Policy, Taylor & Francis Journals, vol. 3(sup2), pages 105-124, December.
  • Handle: RePEc:taf:tcpoxx:v:3:y:2003:i:sup2:p:s105-s124
    DOI: 10.1016/j.clipol.2003.09.006

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    Cited by:

    1. V. Oikonomou & C. Jepma, 2008. "A framework on interactions of climate and energy policy instruments," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(2), pages 131-156, February.
    2. Pablo del Río González, 2007. "The interaction between emissions trading and renewable electricity support schemes. An overview of the literature," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(8), pages 1363-1390, October.
    3. Dijkstra, Bouwe R. & Rübbelke, Dirk T.G., 2013. "Group rewards and individual sanctions in environmental policy," Resource and Energy Economics, Elsevier, vol. 35(1), pages 38-59.
    4. Quirion, Philippe, 2005. "Does uncertainty justify intensity emission caps?," Resource and Energy Economics, Elsevier, vol. 27(4), pages 343-353, November.
    5. Foxon, T.J. & Pearson, P.J.G., 2007. "Towards improved policy processes for promoting innovation in renewable electricity technologies in the UK," Energy Policy, Elsevier, vol. 35(3), pages 1539-1550, March.

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