This Commentary sets out four lines of evidence to argue both that emission forecasts are intrinsically <italic>uncertain</italic>, and that there is clear evidence of <italic>projection inflation</italic> in the forecasts of sector emissions used to underpin the setting of sector caps in emission trading systems. From a limited...

We compare the national allocation plans (NAPs), proposed and submitted by EU Member States as of October 2006, with our estimations for CO₂ emissions by the installations covered by these NAPs. The collective allocations proposed under phase II NAPs exceed the historic trend of emissions...

We quantified the volume of free allowances that different national allocation plans proposed to allocate to existing and new installations, with specific reference to the power sector. Most countries continue to allocate based on historic emissions, contrary to hopes for improved allocation...