A primer on the EU’s emissions trading scheme

This first report of a three-part mini-series explains what an emissions trading scheme (ETS) is and how the ETS has evolved since its introduction in 2005. It then explores how reforms to the ETS have addressed some of the problems that have plagued the scheme in the past. In short, policymakers have finally addressed the supply issues that dogged the ETS in the past and, as a result, EU carbon permits are a far more investable proposition than they once were.

In view of the wider interest, this Climate Economics Focus has also been made available to clients of our Commodities Overview and Energy services.