What Lessons Can Be Learned from the EU Emissions Trading Scheme?

Abstract

The EU emissions trading scheme (EU-ETS) introduced in 2005 is the only mandatory cap-and-trade system operating in the world today. Lessons could be taken from the EU stance which allows for flexibility in rules and realises emission reductions with firm commitments by stakeholders. This CEPS Policy Brief is published in a bilingual English-Japanese version. The Japanese version was originally published in Nihon Keizai Shimbun, 14 February 2008.