FEEM working papers "Note di lavoro" series
2002 .035

Implementing Greenhouse Gas Trading in Europe: Lessons from Economic Theory and International Experiences

Authors: Catherine Boemare, Philippe Quirion
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Type: Journal
Keywords: Emissions trading,climate change policy,policy-making and implementation
JEL n.: D78,Q25,Q28,Q48
JEL: Ecological Economics


The European Commission (2001a) has recently presented a directive proposal to the Parliament and the Council in order to implement a tradable permits scheme. However, as stressed by the positive political economy, due to the influence of various interest groups, very few environmental policies are implemented in their textbook forms. A close look at implemented emission trading schemes, stressing their discrepancies with textbook requests, is thus useful to increase the chances of forthcoming emission trading schemes to go through the political process without being watered down. We thus review ten emission trading systems, that are either implemented or at an advanced stage of the policy process. We draw attention to major points to be aware of when designing an emission trading system: participants, spatial coverage, permits allocation, temporal flexibility, trading organisation, monitoring, enforcement, compliance, and the harmonisation vs. subsidiarity issue. The aim is to evaluate how far experiences in emission trading move away from theory and why. We then provide some lessons and recommendations on how to implement a greenhouse gas emission trading program in Europe. A review of the theoretical and applied literature, and some interviews, lead us to the assessment of the European system.
Download file
Download PDF file

FEEM Newsletter & Update

Subscribe to stay connected.

Your personal data will be processed by Fondazione Eni Enrico Mattei. – data Controller – with the aim of emailing the FEEM newsletter & Update. The use of Your email address is necessary for the implementation of the newsletter service. You are invited to read the Privacy Policy in order to obtain additional information about the protection of Your rights.

This Website uses technical cookies and cookie analytics, as well as “third party” profiling cookies.
If you close this banner or you decide to continue navigating on this Website, you express consent to the use of cookies. If you need additional information or you wish to express selective choices on the use of cookies, please refer to the   Cookie PolicyI agree