The author provides an overview of carbon markets and explains how emissions trading can be important in encouraging the reduction of CO2 emissions in an efficient manner. He describes the key steps in establishing a cap-and-trade system, and reviews the European experiences with emissions...

The EU-wide Emission Trading Scheme (ETS), established in 2005, is a key pillar of Europe¿s strategy to attain compliance with the Kyoto Protocol. Under this scheme, CO2 allowances have thus far been allocated largely free of charge. This paper demonstrates that such cost-free allocation,...

This paper describes the main features of a model developed for fore-casting economic developments, energy demand and greenhouse gas emissions in the EU area and Finland as well as for simulating the economic impacts of EU climate policy. Climate policy analysis necessitates a model of the whole...