Introduction

Abstract

Hailed as the cornerstone and flagship of EU climate policy, the Emissions Trading System (ETS) covers almost half of the EU’s total greenhouse gas emissions. Internal agreement on the development of this flagship is essential to achieving the EU’s decarbonization ambitions. In 2013 the ETS was in severe crisis, with a huge surplus of allowances and a sagging carbon price. Even a formally simple measure for changing the timing of auctioning was rejected by the European Parliament. Yet, only two years later, the fundamental Market Stability reserve measure was adopted, with proposals for total ETS overhaul. How was it possible to turn the flagship around so quickly? This book utilizes close study of background documents and fresh interviews to narrate the fascinating story.