Egmont Institute logo

The EU’s emissions trading scheme: achievements, key lessons, and future prospects

Post thumbnail print


This paper analyses the lessons learnt so far from the EU ETS in order to have a better perspective of its future. Despite the diverse achievements of the scheme, it is still far from having fulfilled its theoretical potential. Although it has been proven that the EU ETS led to abatement during the first phase, carbon prices have remained too low to promote investments in the development, diffusion and deployment of low-carbon technologies. Yet, if the EU wants to achieve the long-term challenge of ‘decarbonising’ its economy, a credible and long-term carbon price is needed to insure green investments. By reducing industrial production, the economic recession has certainly reduced emissions but has also ensured that carbon prices stay low in the forthcoming years. In order to ensure the credibility of the scheme, the EU ETS must be unilaterally revised towards an objective of 30% emission reduction by 2020. This would not only correct the negative consequences of the economic recession on the scheme but would also boost investment in the development of green technologies.
(Photo credit: Diego3336, Flickr)