Climate Notes: Emissions Trade – Familiar Problems, New Solutions?

The third trading period of the European Emission Trading Scheme (EU-ETS) to prevent greenhouse gas emissions started in 2013 and will continue up to 2020. Taking stock after the first half of the trading period, it can be seen that the structural problem of EU ETS – an oversupply of emission allowances and a concomitantly low trading price – continues to exist. However, reform measures were initiated during this period with the aim of reducing this surplus. An important factor here is the Market Stability Reserve, which is expected to take effect in 2019, but whose prospects for success are viewed sceptically by experts.