Table of Contents

Climate Change and European Emissions Trading

Climate Change and European Emissions Trading

Lessons for Theory and Practice

New Horizons in Environmental and Energy Law series

Edited by Michael Faure and Marjan Peeters

This timely book focuses on the EU-wide greenhouse gas emissions trading scheme for major sources. It combines legal and economic approaches and reviews the major revision of this scheme. A distinguished range of authors assess the experiences thus far and also consider future development from both theoretical and practical perspectives. They also discuss many design options, including auctioning, credit and trade, the inclusion of aviation emissions, and linking possibilities. Moreover, attention is paid to the role of legal principles, the role of case law, and to aspects of democratic accountability within an emissions trading scheme. Ways to avoid carbon leakage and the role of national climate policies are also discussed. This book makes clear that the economic efficiency and effectiveness of an emissions trading scheme depend to a large extent on the specific legislative choices, and hence the legislative design of such a scheme deserves meticulous attention.

Chapter 1: Introduction

Michael Faure and Marjan Peeters

Subjects: environment, environmental law, law - academic, environmental law

Extract

Michael Faure and Marjan Peeters 1. PROBLEM DEFINITION: REASONS FOR THIS BOOK Emissions trading can no longer be seen as just an interesting theoretical exercise: this market-based approach has developed an increasingly important role, first within the environmental law framework of the USA and later also within that of the EU. The instrument of emissions trading has been applied in order to combat significant environmental problems like acid rain, ozone-depleting substances and climate change. Regarding the two latter problems, the instrument is applied both on the international level as well as on national levels. Notably for the greenhouse gas emissions problem, emissions trading seems to be very much suited to reaching the necessary reductions in a costeffective way. In Europe there is now some experience with emissions trading as a result of the implementation of the greenhouse gas Emissions Trading Scheme (EU ETS).1 The EU ETS is the biggest regional emissions trading system established thus far. The first trading period started on 1 January 2005 and finished on 31 December 2007; the second trading period, during which this book will be published, runs till 2013 and thus comprises five years. In the meantime, only three years after the start of the first trading period, the European Commission released on 23 January 2008 a proposal for a major revision of the EU ETS, which should change the system from 2013 onwards.2 This proposal includes challenging new topics, like auctioning of allowances, an additional and gradually declining free allocation of allowances...