Borch-Kristensen, Mads

Gade, August Emil

Holt, Mathias Svanekjær

Johannesen, Hjalti

Neiman, Mikkel

Nielsen, Mads Anker

This paper investigates why the European Union Emissions Trading Scheme has faced numerous criticisms, since its establishment in 2005. Within the analytical framework of the applied economical and political theory, it is concluded that the extensive over allocation of CO2 permits systematically prevents the price of carbon emissions of reaching a level, at which it is economically feasible for businesses to invest in greener technology, rather than buying extra permits. Therefore, the system is in critical need of reform if the EU is to reach its targeted emissions, as defined by the Kyoto Protocol in 1997. Through an analysis of the different possibilities for reforming the system it is concluded that a tax on CO2 emissions, either combined with the current system or as a replacement, is the most economically feasible option. Even so the political options on this are severely limited as different interests within the European Union actively prevent these kinds of climate measures of ever taking place.This paper investigates why the European Union Emissions Trading Scheme has faced numerous criticisms, since its establishment in 2005. Within the analytical framework of the applied economical and political theory, it is concluded that the extensive over allocation of CO2 permits systematically prevents the price of carbon emissions of reaching a level, at which it is economically feasible for businesses to invest in greener technology, rather than buying extra permits. Therefore, the system is in critical need of reform if the EU is to reach its targeted emissions, as defined by the Kyoto Protocol in 1997. Through an analysis of the different possibilities for reforming the system it is concluded that a tax on CO2 emissions, either combined with the current system or as a replacement, is the most economically feasible option. Even so the political options on this are severely limited as different interests within the European Union actively prevent these kinds of climate measures of ever taking place

EU ETS - Evaluering og reformmuligheder: EU ETS - Evaluation and reform possibilities

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