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The European Union Emissions Trading System : should we throw the flagship out with the bathwater ?

  • Frédéric Branger

    (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - AgroParisTech - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique)

  • Oskar Lecuyer

    ()

    (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - AgroParisTech - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique)

  • Philippe Quirion

    ()

    (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - AgroParisTech - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique)

The European Union Emissions Trading System (EU-ETS), presented as the ''flagship'' of European climate policy, is subject to many criticisms from different stakeholders. Criticisms include the insufficient carbon emissions reduction, the competitiveness losses and the induced carbon leakages, the unfair distributional effects, the frauds and the existence of several other overlapping climate policy instruments. We review these criticisms and find the EU-ETS brought small but real abatements. The competitiveness losses and carbon leakages do not seem to have occurred. The distributional effects have indeed been unfair and fraud has been important. Finally, the scheme does not justify abandoning other climate policies. Some of these problems could have been avoided and can still be corrected by rethinking flexibility mechanisms and by adding some control over the carbon price.

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Paper provided by HAL in its series CIRED Working Papers with number hal-00866408.

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Date of creation: Jul 2013
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Handle: RePEc:hal:ciredw:hal-00866408
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