The well known economic advantage of tradable permits over command and control obviously vanishes if firms do not trade because of regulatory uncertainty. In fact, uncertainty about political decision changes in the permits program could make firms reluctant to participate in tradable permits...

This article investigates firms’ banking and pooling behaviors in the context of the EU Emissions Trading Scheme (EU ETS) during Phase I (2005-2007). It provides an overview of the questions raised at the firm-level by the introduction and implementation of the EU trading system in terms of...