Study challenges conventional view that the ETS has failed, hailing the scheme's profound impact on the European energy sector
The widespread view that the EU's emissions trading scheme (ETS) has failed to deliver expected reductions in emissions "cannot be sustained on the basis of the evidence", according to a major new study of the first phase of the scheme that hails the cap-and-trade initiative as successful and a "path-breaking" policy experiment.
The study assesses the first phase of the EU ETS, which ran from 2005 to 2007 and was widely regarded as a failure due to an over allocation of emission allowances (EUAs) that resulted in a slump in the price of carbon.
However, the researchers estimated that despite the price of carbon falling to almost zero the scheme still led to a reduction in greenhouse gas emissions of between two and five per cent against business-as-usual scenarios, resulting in carbon savings 120m to 300m tons during the three year period.
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