, Volume 39, Issue 3, pp 119–121 | Cite as

Emissions trading in Europe: Effective tool or flight of fancy?

  • Claudia Kemfert
  • Jochen Diekmann
  • Hans-Joachim Ziesing
Forum The EU Emissions Trading Scheme — Issues and Challenges


The NAPs must be compatible with the climate goals and emissions reduction targets. Within the first period there will be no concrete sanction mechanism if countries fail to achieve their target, as is planned for later periods. A stringent allocation of allowances would prevent too high a burden on private households and the transport sector. In addition, it would also increase the incentive for other flexible mechanisms such as Clean Development Mechanisms (CDM) and (later on) Joint Implementation (Jl). Conversely, some important aspects of the trading system, such as the treatment of newcomers or how to react to the dynamics of the market, are not regulated at the European level. This provides a large scope for strategic action and creates uncertainties.

In Germany as well as in many other countries, negotiations between politicians and industrial lobbyists has led to a less effective emissions trading system. It is questionable whether there will be significant emission trading at all. The climate goal cannot be reached if industries get the emissions allowances that they need to continue business as usual. In the future, it would be desirable to harmonise the specific rules of the initial allocation plan among all European countries in order to avoid strategic behaviour and a weakening of the entire trading system.


Clean Development Mechanism Abatement Cost Emission Trading Trading System Emission Allowance 
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  1. 1.
    European Commission: Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, in: Official Journal of the European Union, L 275/32, 25.10.2003.Google Scholar
  2. 2.
    European Commission: Emissions trading — National allocation plans, Final national allocation plans and available drafts of national allocation plans, 2004, climat/emission_plans.htm.Google Scholar
  3. 3.
    Federal Ministry for the Environment, Nature Conservation and Nuclear Safety: National Allocation Plan for the Federal Republic of Germany 2005–2007, Berlin, 31 March 2004, translation: 07 May 2004; Bundesregierung: Entwurf eines Gesetzes über den Nationalen Zuteilungsplan für Treibhausgasemissionsberechtigungen in der Zuteilungsperiode 2005 bis 2007 (Zuteilungsgesetz — NAPG), Kabinettsbeschluss vom 21.4.2004 (Draft of a German National Allocation Plan Law).Google Scholar

Copyright information

© HWWA and Springer-Verlag 2004

Authors and Affiliations

  • Claudia Kemfert
    • 1
    • 2
  • Jochen Diekmann
    • 1
  • Hans-Joachim Ziesing
    • 1
  1. 1.German Institute for Economic Research (DIW)Germany
  2. 2.Humboldt UniversityBerlinGermany

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