This paper discusses fundamental aspects of the European emissions trading system which has been implemented in January 2005. We show how institutional features set by the EU Commission and the required subsidiary decisions by the respective Member States are potentially in conflict with the...

We assess the design of the recent environmental tax reform in Germany. Based on fundamental welfare economics we argue that extensive tax reductions and rebates in favour of energy-intensive industries, as provided by the tax reform, substantially water down its cost-effectiveness. The...

Climate change ranks high on the policy agenda of the European Union (EU) which considers itself as a leading force in the battle against global warming. The EU is committed to the objective of limiting the rise in global average temperature to no more than 2° Celsius above pre-industrial...