Theoretically, emissions trading is an ideal energy and climate policy instrument. In practice, however, its design and realization give rise to numerous questions and pose problems. For the European Emissions Trading System (EU ETS) to be introduced, major opposition from both industry and...

The paper gives a brief overview of probable further developments of the EU-ETS. At first, we discuss scenarios for the auspices of the Post-Kyoto-Regime providing a general framework of the EU-ETS in the period after 2012. We find that Europe is likely to still have an ambitious CO2-regime...

Emissions trading will only have the desired effect if the CO2 price signal, in line with the market, leads to changes in supply and demand behavior in an economy. The associated price effects are - although possibly undesired in a specific business case - systemic and must continue to apply....