Climate Policy, Emission Trading and the EU ETS: A Review

This paper reviews the main characteristics of climate policy, emission trading and the European Union Emission Trading Scheme (EU ETS). First, we present the origins of emission trading and climate policy. We also discuss the last negotiations on how to prolong the Kyoto Protocol and the international climate policies beyond 2012. Second, we review previous experiences of emission trading prior to the launch of the EU ETS. Finally, we give a wide overview of the EU ETS. The main factors that affect the functioning of the EU ETS are then discussed, as well as the changes that will be effective for Phase 3 (2013-2020).Climate Policy, Emission Trading, EU ETS