MIT Report: World Can Learn From European Cap-And-Trade System

July 4, 2008

The EU cap-and-trade system has operated well and has had little or no negative impact on the overall EU economy, according to an MIT analysis.

Email this story Print this post Add your comments

The EU cap-and-trade system has operated well and has had little or no negative impact on the overall EU economy, according to an MIT analysis.

Despite the quick adoption and unsure start of the European system, which operates internationally and is larger than either of the U.S. programs for SOx and NOx, it is “far more than any other nation or set of nations has done to control greenhouse-gas emissions — and it works surprisingly well,” according to A. Denny Ellerman, senior lecturer in the MIT Sloan School of Management.

“I think the EU ETS has a lot to tell us about how a global system might actually work,” Ellerman says.

According to the report, Europe’s system shows that

The economic effects — in a macroeconomic sense — have not been large;
Permitting “banking and borrowing” will make a cap-and-trade system work more efficiently; and
Even though the process of allocating emissions allowances is going to be contentious, cap-and-trade is still the most politically feasible approach to controlling carbon emissions.

Large cities like Tokyo are passing legislation that will require a cap-and-trade scheme for emissions. 1,300 of the biggest polluters there that are responsible for 20 percent of emissions in the capital city. Still the G8 climate change talks July 7-9 are not expected to result in anything more than a “large rhetorical statement” about reducing emissions worldwide.

Email this story Print this post Add your comments

Advertisers

Make sustainability part of your strategy.

Get equipped at the SAP Sustainability Resource Center. >>

Unclear about the EPA's new GHG Rule?

Learn how it could affect your business. >>

EPA mandatory emissions reporting starts Jan 1st

CSA Standards can help your organization get ready for compliance. Find out how. >>

Survey Results: Product Environmental Compliance Best Practices

How to achieve compliance at a significantly lower cost. Download the full report. >>

Join the Discussion

Recent Daily News [ see all ]

11/23/2009
11/20/2009
11/19/2009

Charts [ see all ]

European Paper Industry Cuts CO2 Emissions by 42% since 1990

S. America Takes Most Urgent View of Copenhagen Talks

Nike Tops Annual Climate Action Scores

Oceans May Trap more Carbon than Forests

Jobs

View All Jobs >> Post a Job >>

Comments and Discussions

Rod Johnson on Stimulus Package Delivers $2.4 Billion for Electric Vehicle Projects
"Will this stimulus be extended to other electric utility vehicles?"

Charli on Trade Group on EPA Chemical Regs: ‘If Everything is a Priority, Then Nothing is a Priority’
"Thanks Environmental Leader, for..."

James Beddingfield on Oceans May Trap more Carbon than Forests
"Another great thing about an ocean-based carbon sink is that it can’t..."

Custom Organic Shirts on Climate Scientists Alleged to Have Manipulated Data
"Wow, EL – should have seriously done even some background research..."

Phil on Climate Scientists Alleged to Have Manipulated Data
"Pete old boy, why don’t you just trot out the math that carries you from your..."

Roy Tindle on Climate Scientists Alleged to Have Manipulated Data
"It’s worth reading the report on RealClimate, a website by climatologists:..."

TreeBanker on SEC Charges Four in ‘Green’ Investment Ponzi Scheme
"This is a real shame because Matria and their subsidiaries have access..."

Environmental Leader