Climate notes: Emissions Trading – Worldwide Developments and Current Problems

The introduction of a worldwide emissions trading system is generally seen as the most effective way of reducing worldwide emissions of greenhouse gases – especially of CO2 – and thus of combating climate change. Such a system effectively limits the emission of CO2 and, at the same time, ensures that CO2 emissions are avoided in a cost-effective manner. There is certainly a long way to go towards achieving such a system, but it is encouraging to see that a growing number of countries and/or regions are introducing this kind of system or contemplating such a move. At the same time, it must be said that the most important trading system in the world at the moment, the European Emissions Trading System (EU ETS), is not functioning as smoothly as hoped. This article in the series "Climate notes" summarizes developments worldwide and looks at the current problems facing the EU ETS.