European Emissions Trading in Practice: An Economic Analysis(New Horizons in Environmental and Energy Law series)

This unique and up-to-date book analyzes the functioning of the European Emissions Trading Scheme (ETS) and assesses the extent to which relevant legislation has affected its capacity to promote cost-effective reduction of European carbon emissions. The author investigates whether inefficiency has been caused by both the ETS cap setting procedure and by the ETS relevant allocation rule, as defined by the Directive 2003/87/EC. He then considers whether the new Directive 2009/29/EC, which reforms the ETS institutional design, is likely to improve the scheme's effectiveness by reducing the risk of carbon leakage -which could potentially be induced by implementing a unilateral policy across the asymmetric political landscape of Europe. This well-documented book will appeal to researchers and postgraduate students in environmental law and environmental economics, as well as policy makers within environment, industry and economics, and electric and industrial operators and stakeholders. Environmental NGOs, energy and environmental consulting groups, members of the European Commission, and energy and environmental think-tanks will also find much to interest them in this insightful book. Contents: 1. Introduction; 2. Climate Change and the Kyoto Protocol: An Overview; 3. Toward a Cap and Trade Scheme Solution: Economic and Legal Instruments to Address the Problem of Externality; 4. Legal and Economic Aspects of the European Emissions Trading Scheme; 5. Analysis of the EU ETS Effectiveness: Assessing the Stringency of the ETS Cap; 6. Analysis of the Allocation Rules: Do Polluters Pay under Grandfathering?; 7. ETS Reform and Carbon Leakage: Assessing the Inconsistencies of the New ETS Directive; 8. Summary and Conclusions; References

Table of Contents:
Contents: Foreword 1. Introduction 2. Climate Change and the Kyoto Protocol: An Overview 3. Toward a Cap and Trade Scheme Solution: Economic and Legal Instruments to Address the Problem of Externality 4. Legal and Economic Aspects of the European Emissions Trading Scheme 5. Analysis of the Effectiveness of the EU ETS: Assessing the Stringency of the ETS Cap 6. Analysis of the Allocation Rules: Do Polluters Pay under Grandfathering? 7. ETS Reform and Carbon Leakage: Assessing the Inconsistencies of the New ETS Directive 8. Summary and Conclusions References Index

About the Author :
Stefano Clò, University of Milan and (RIE) Ricerche Industriale ed Energetiche, Italy

Review :
'Emission markets are crucial both to provide the right incentives to reduce GHG emissions and to fund investments necessary for a transition to a low carbon world. Emission markets however cannot achieve these objectives if inappropriately designed. This book is a novel and fresh attempt to look at the real functioning of the EU Emission Trading Scheme and to assess its effectiveness and inconsistencies, its positive and negative impacts on industrial and financial markets. With the overall objective to improve its design and performance.' - Carlo Carraro, University of Venice, Italy 'This important book has the great achievement of addressing a complicated and socially highly debated issue of how society could be given optimal incentives for emission reductions from a legal and economic perspective. Moreover, it not only addresses the various issues from a theoretical perspective, but provides important empirical evidence on the working of emissions trading as well. The book will undoubtedly have important lessons not only at the theoretical level, but also for policy makers interested in improving the effectiveness of emission trading schemes.'