The Emissions Trading scheme now (January 2003) in prospect in the European Union is likely to be the first trans-national greenhouse gas emissions trading scheme in the world. With the participation of the European Economic Area EEA countries and with the forthcoming EU enlargement, 30 countries could be involved in this scheme by 2012. Under European Union law, the European Commission is responsible for making proposals, which are then decided upon by the Council of Ministers - on a 'qualified majority' basis in this case - representing the 15 Member State governments, and the European Parliament. In the case of this Directive, the Commission prepared its initial proposals, which have then been scrutinised by the European Parliament and the Council of Ministers. The objective of this work is to provide an assessment of the EU Emissions Trading Directive as agreed by the Council of Ministers. The agreement was reached looking at both, the characteristics and potential of this scheme. For some of the issues, there is theory and evidence to support the case made. For others, the absence of evidence means that intuition is called upon.
Dunne et al. (Wed,) studied this question.